Paper Topic:

What is Foreign Direct Investment (FDI)? Why might firms favour FDI rather than exporting, licensing or franchising?

What is foreign Direct Investment ? Why firms favor FDI rather than exporting licensing or Franchising

Name

Tutor

Course

Date

University

In their book `Foreign Direct Investment and Regional Economy Jonathan Jones and Wren Colin argue that foreign direct investment (FDI is the process where firms or individuals provides capital to an already existing firm or to a newly created firm in another country . Jones J and Wren C (2006 , 7 . A multinational enterprise (MNE ) is the name given to firms who have establishments in more than one country

. The Organization for Economic Cooperation and Development (OCED ) defined FDI as `investment that adds to , deducts from or acquires a lasting interest in an enterprise operating in an economy . Jones J and Wren C (2006 , 8 The foreign investor has a considerable influence in the management . In the wake of globalization the role of FDI 's cannot be underscored in propelling economic growth across the globe . It is estimated that the global inflows from private FDI 's rose from 159 billion in 1991 to a tune of 1 .1 trillion in a decade 's time . The success of any MNE 's will be affected by the approach that the firm uses entering a market . MNE 's must consequently be very keen before making the final decision of which entry method to apply . This will focus on elaborating what FDI is as well as highlighting why it is to licensing , exporting or franchising

History has it that initially MNE 's were...

9 pages

46.5 KB

Free sing-up