310 lecture 10
•Download as KEY, PDF•
2 likes•444 views
This document discusses the benefits and costs of foreign direct investment (FDI) for both host and home countries. Some key benefits of FDI for host countries include resource transfers of capital, technology and management skills which can boost employment, balance of payments, and competition/economic growth. However, FDI can also increase competition that harms local companies or allow foreign companies to monopolize industries. For home countries, FDI provides inflows of foreign earnings and increased demand for exports, but it can also lead to capital outflows and loss of production/jobs. Governments of both host and home countries have policy tools to encourage or restrict FDI.
Report
Share
310 lecture 10
- 1. International Economics Lecture 10 More on FDI pages 259-273
- 3. Benefits and Costs Host Country - Receiving Home Country - Source
- 4. Host Country Benefits
- 5. Host Country Benefits Resource-Transfer Effects Employment Effects Balance-of-Payment Effects Competition and Growth
- 6. Resource-Transfer Effects
- 7. Resource-Transfer Effects Capital Technology Management
- 9. Employment Effects Direct Indirect Higher wages More productive
- 10. Balance-of-Payment Effects
- 11. Balance-of-Payment Effects Current account Net of payments and receipts FDI substitutes imports China cell phones
- 12. Competition and Growth Effects
- 13. Competition and Growth Effects More choices Higher quality & lower costs Cell phones
- 14. Host Country Costs
- 15. Host Country Costs Competition & Monopoly Balance-of-Payments Independence
- 16. Competition and Monopoly
- 17. Competition and Monopoly Harm local companies then monopolize Mergers
- 18. Balance-of-Payment Effects
- 19. Balance-of-Payment Effects Invest in then take profits out Import parts to assemble Local content requirements
- 20. Independence
- 21. Independence National Sovereignty and Autonomy Competition prevents ransom
- 22. Home Country Benefits
- 23. Home Country Benefits Inflow of foreign earnings Demand for exports Intermediate and compliments Learn new skills
- 24. Home Country Costs
- 25. Home Country Costs Balance-of-Payments Capital Out Low cost production No longer an export Employment
- 26. Government Policy Instruments
- 27. Government Policy Instruments Home Country Encourage Insurance, loans, tax credits Political pressure Restrictions
- 28. Government Policy Instruments
- 29. Government Policy Instruments Host Country Encourage Insurance, loans, tax credits Restrictions Ownership and Performance
- 30. WTO 1995
- 31. WTO 1995 Services Telecommunications Finance
- 32. Transportation Low Export Costs and Tariffs? High Knowledge amenable No FDI to licensing Yes Tight control over Yes FDI operation No Protected knowledge No FDI with contract Yes License
Editor's Notes
- \n
- \n
- \n
- \n
- \n
- \n
- \n
- \n
- \n
- \n
- \n
- \n
- \n
- \n
- \n
- \n
- \n