Advantages And Disadvantages Of Foreign Direct Investment In International Business

International marketing or business is uniquely different from the local market because the product price, place and promotion is vastly different from what is been offered to local customers (Johansson, 2000) With the emergence of the information technology, cross border marketing has never been a distant dream. However, it has never been easier even for giant multinational companies to face challenges that come in international business. The biggest challenge comes from the culture which varies from country to country.

This paper contributes to the global strategy literature by outlining the four debates that we believe to be frontier issues with which the field will engage in the years to come. Its purpose is to review four current debates taking place in the field of global strategic management and international business. The review provides in-depth coverage of the four major global strategic management debates, comprising: (1) cultural vs institutional distance; (2) global vs regional geographic diversification; (3) convergence vs divergence in corporate governance, and (4)

With the above established, it should now be explained what methodology will be used for the model under review as part of this research and reporting. The main thing of a statistical nature that is looked at when it comes to foreign direct investment is its impact on the economy. Since it is direct, it stands to reason that the investment will not get muddled and polluted by the path it takes into the economy. At the same time, the impact will surely not be a 1:1 situation where one dollar spent means one dollar of growth or anything else resembling that simplicity. As such, the equation and formulas used to calculate the impact of direct foreign investment will not be simple but it will not be overly complex, either (Borensztein, De Gregorio & Lee, 115-135).

FDI allows the home country to invest into the host country to produce, advertise, and distribute products, in order to upsurge their market share and provides a long-term investment and enhancement. (Moosa, 2002)

Various host countries have different cultures, tastes and needs, thus FDI in services needs to be adapted to the tastes of local customers. Due to this, cultural distance is also found to be an important determinant of FDI in services.

This research focus on the various factors that motivates the different core parts to relocate. (Lewin and Volberda, 2011) states that moving a core part outside the border creates strategic benefits for the multinational company, like acquiring a higher and more efficient strategic knowledge by engaging with people from different context, or it can improve the access to international market or may provide a lower-cost fiscal regime.There are different set of arguments as to why MNCs move business unit and Corporate Headquarters overseas. If we are to base our research on established theories, we can easily say that the research is based on international business concerned with the nature and scope of the MNC. The Predictors of Business Head Quarters relocation (Dunning,1981;Rugman 1981, The theory of Multinational Corporation) suggests that the locational choices the MNS makes for each activity is just a comination of needs that will offer more advantages to the firm. (Rugman and

Cultural Distance is presumably measured by “the extent to which different cultures are similar or different” (Shenkar, 2001). This construct is now widely used and applied to most business organisation disciplines, such as, management, finance, marketing, and accounting. However, to better explain the impact on global marketing operations, this essay will focus on the marketing segment of the discipline. The study of cultural distance has been used to innovate and transform organisations into foreign expansions and technology transfer (Gomez-Mejia & Palich, 1997). Besides, looking at culture by itself, it is a complicated term to understand. It is seen as a woolly concept , almost impossible to observe and ‘measure’ (Tayeb, 2000c); by then adding the measurement of “distance” between different cultures presents a greater challenge due to the fact that cultural behaviour is not the same across the world. A close attempt at measuring culture would be to break it down to components or dimensions.

Foreign Direct Investment (FDI) is a venture made by an organization or element situated in one nation, into an organization or substance situated in an alternate nation. Outside immediate ventures vary generously from aberrant speculations, for example, portfolio streams, wherein abroad establishments put resources into values recorded on a country's stock trade. Elements making immediate ventures commonly have a huge level of impact and control over the organization into which the speculation is made. Open economies with talented workforces and great

The key feature of FDI is essentially that of control. This separates it from a traditional portfolio investment. When a business makes a foreign direct investment, it establishes either effective control or substantial influence over the decision-making process of the business or the operation.

Foreign Direct Investment (FDI) has been considered important for the growth of a country. When the individuals or companies from a country invest in another country, it is regarded as FDI. FDI not only strengthens the manufacturing base of the host country but also contributes to the strengthening of the economic outlook. FDI can be seen as an investment that leads directly to job creation in an economy. The unemployment rate decreases due to FDI, which leads to stability in economic, social and political spheres. This leads to establishing the notion that FDI is necessary for a country because it helps in strengthening the economy of a particular country. Ireland has been benefitted by

Foreign Direct Investment is the direct investment in new facilities or companies to expand a business in a new country. In evaluating and analyzing East Asia, it is important to focus on cultural issues as they are major indicators of the business environment and implementation in a given local. East Asia, including China, only began opening up for foreign investment in the 1970s. Japan is considered a developing market, where the rest of Eastern Asia is an emerging market, the majority of FDI around the world is targeted to developing nations due to increased stability, consumer culture, and large markets. The risk of emerging markets is greater than in developed, thus yielding a greater return on investment when the endeavor succeeds.

Based on OECD Factbook 2013: Economic, Environmental and Social Statistics, Foreign direct investment defined as cross-border investment by other investors from the economy that had the objective to gain long term interest or benefit from other countries that need capital for development. FDI have divided into 3 categorty such as Horizontal FDI, plaform FDI and vertical FDI. Kimberly state that Foreign direct investment is global economic growth which are apply in all countries such as developing and emerging market countries. The main purpose of FDI that the investor from other countries invests the surplus capital to other countries to gain benefit. At same time, the developing countries will gain more advanatge on

Foreign Direct Investment (FDI) is a major or key element in international economic integration. Foreign Direct Investment creates a stable, direct and long lasting connections between economies. It therefore encourages the transfer of technology know how between countries and allow the host country to promote its products more widely in international markets. It is also and additional source of funding for investments and it can also be an important form of development. Foreign Direct Investment is an investment in a business firm by an investor from another country in which the foreign investor has control or a significant degree of influence over the company or firm. The Organization of Economic Cooperation and Cooperation

Economists believe that Foreign Direct Investments is an essential part of economic evolution in every country. There are many academic papers that attempt to assess FDI aspects. Despite many researchers have tried to give an accurate explanation to FDI, there is no comprehensively approved theory. FDI motivations have been mainly researched by John Dunning, Stephen Hymer, Raymond Vernon, etc.

Foreign Direct Investment is the investment of a country domestic assets into foreign structures, equipment and organizations, but does not include investment into stock markets. Foreign direct investment reflects the objective of obtaining a lasting interest by a resident entity in one economy (direct investor) in an entity resident in an economy other than that of the investor (direct investment enterprise). The lasting interest implies the existence of a long-term relationship between the direct investor and the enterprise and a significant degree of influence on the management of the enterprise. Direct investment involves both the initial transaction between the two entities and all subsequent capital transactions between them and among affiliated enterprises, both incorporated and unincorporated.