Paper Topic:

International Bussiness Strategy

International Business Strategy

Foreign Direct Investment inflows are directly related to institutional economics as an organisation . The nature of an economy and government policies extensively influence the amount of FDI into a country and the possibility of FDI increases when a country is favourable in terms of lesser uncertainty and is parallel with lesser costs for long term capital investment . The institutional systems of a nations combined with traditional concepts of business attracts higher amount of FDI Institutional variables like lesser risk and lesser costs for multi national companies improve the

rate of FDI flows . Political stability of a nations and the level of corruption is also a variable associated to FDI inflow . Traditional variables that influence FDI is mainly the size of the local market and the rate of foreign exchange has little impact on FDI inflow (Robert , G Trevino , L . J . 2005

Nations that have strct constitutional systems and cultural barriers in North Africa and Middle East are now aggressive on reforming their economic policies to attract FDI and thereby improve theie standard of living and stimulate development in the economy . Multinational corporates play a great role in developing an economy but regional issed like legal and bureaucratic barriers and restrictions on FDI drive away prospective investors . All the economy that has changed their policies are now enjoying the fruit of higher economic growth boosted by FDI activities . Many nations in Africa and the Middle East are yet to reap the benefits of FDI (Abbas J . Ali A .J , Becker , K Taiani , V (n .d

It is traditionally believed that modern , straight forward and a western legal system should be prevalent in a nation for a foreign investor to enter that nation . This concept is followed according to the neo-institutional theory that describes that a good legal system and an efficient economy lessens transaction cost for a forieng investor . If the transaction cost is high the corresponding cost of investment is likely to be high . This would deviate the investor to invest in nations where these factors are acceptable (Hewko , J (n .d

Communist nations like China have made reforms to their policies and have taken advantage of their geographical location to attain high levels of economic growth (Huang , Y . 2003 .

.48 . Further the openness and closedness of the economy influences the rate of FDI inflows into a nation (Tulder , R .V Zwart , A .V .D . 2006 .

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Reference

Abbas J . Ali A .J , Becker , K Taiani , V (n .d . Import Orientations for Jordanian-Based Companies . Retrieved from

HYPERLINK "http /www .haworthpress .com /store /toc /plainv /J130v06n01_TOC .txt ?sid 7G7 5LXG0MNRD8LP7HXNAM0EVBF8M5V9B http /www .haworthpress .com /store /toc /plainv /J130v06n01_TOC .txt ?sid 7G75 LXG0MNRD8LP7HXNAM0EVBF8M5V9B . Accessed on September 7 , 2008

Hewko , J (n .d . Foreign Direct Investment : Does the Rule of Law Matter Retrieved from HYPERLINK "http /www .worldbank .org /html /prddr /trans /marapr02 /pgs11-13 .htm Accessed on September 7 http /www .worldbank .org /html /prddr /trans /marapr02 /pgs11-13 .htm Accessed on September 7 , 2008

Huang , Y . 2003 . Selling...

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