Part 1&2 - Foreign Direct Investment

Foreign Direct Investment

PART 1- 160-175 words

The World of Foreign Direct Investment

Foreign direct investment (FDI) is a key element in international economic integration. FDI creates direct, stable and long-lasting links between economies. It encourages the transfer of technology and know-how between countries, and allows the host economy to promote its products more widely in international markets. FDI is also an additional source of funding for investment and, under the right policy environment, it can be an important vehicle for development.

FDI is defined as cross-border investment by a resident entity in one economy with the objective of obtaining a lasting interest in an enterprise resident in another economy. The lasting interest implies the existence of a long-term relationship between the direct investor and the enterprise and a significant degree of influence by the direct investor on the management of the enterprise. Ownership of at least 10% of the voting power, representing the influence by the investor, is the basic criterion used. (Source: http://www.oecd-ilibrary.org/sites/factbook-2013-en/04/02/01/index.html?itemId=/content/chapter/factbook-2013-34-en)

DISCUSSION BOARD ASSIGNMENT:

1.            RESEARCH FDI on the Internet. You may select FDI in either the U.S. or abroad. For background information, the link to the OECD iLibrary has been provided. https://www.oecd-ilibrary.org/sites/factbook-2013-en/04/02/01/index.html?itemId=/content/chapter/factbook-2013-34-en

2.            SELECT AN ARTICLE OR NEWS ITEM THAT DEALS WITH FDI.  This is a link to an article that I found about China in Time magazine: "Hey China, Foreign Direct Investors Just Aren't That Into You" http://time.com/13789/hey-china-foreign-investors-just-arent-that-into-you/

3.            COPY THE LINK TO YOUR ARTICLE into your initial post.

DISCUSSION POSTINGS:160-175 WORDS

1.            Briefly describe your article and what it says about FDI. Make sure to include information about any trends that you find in your article. Is FDI on the rise or decline? Is it shifting from one country to another?

2.            Why is FDI such a good option for businesses that want to go global? What does your article or research say that supports your position?

3.            What do you think the future is for FDI?

PART 2-POST REPONSES TO THE FOLLOWING CLASSMATE’S POST. (80 - 100 words)

https://www.firstpost.com/business/fdi-in-services-sector-slumps-23-to-6-7-billion-in-2017-18-shows-dipp-data-4750291.html

This week I chose this article about how the FDI in the services sector is in a slump in India.  According to the article the slump is being caused because of the rerouting of investments to the economies of countries like the US.  It appears that the FDI is shifting to countries like the US because the US has recently seen an increase in interest rates and a stronger dollar. FDI is a good option for businesses that want to go global and India is very dependent on FDI because they are going to need huge investments to overhaul the infrastructure structure to boost the growth of the country. I think that the FDI will continue to shift to countries like the US if tariffs on specific manufactured goods are on the rise.  The tariffs are causing negative effects on job growth in the US but many countries are investing in the manufacturing companies that will see growth in the coming months and years.