Latin American Countries

According to Moosa (2002), “Hymer (1976) organized the industrial organization hypothesis. Kindleberger (1969), Caves (1982) and Dunning (1988) further explained the hypothesis. This theory assumes that the firms when it establishes an enterprizes in another country it suffers from many disadvantages in comparison to local investors. The cultural aspects, languages, legal system and other factors play an important role in determining FDI. But there is increase in FDI. The theory explains about why firms invest in foreign countries. But the theory fails to explain the motivation for choosing the locations. This theory explains the expansion of FDI is due to capital, management, technology, marketing, and access to raw materials, economies of

Latin America is doing both positive and negative changes to their economy. In my opinion, I think that latin is making more positive changes than negative changes. I gathered many of my facts and supporting evidence from the textbook Geography and History of the World. A lot of the information

. FDI IN MEXICO To begin describing how has been the growth and progress of FDI in Mexico it is important to define FDI itself. According to the OECD Economic Outlook of 2003, Foreign Direct Investment is “an activity in which an investor resident in one country obtains a lasting interest in, and a significant influence on the management of, an entity resident in another country. This may involve either creating an entirely new enterprise or, more typically, changing the ownership of existing enterprises (via mergers and acquisitions)” (157).

Chile has become a market-oriented economy characterized by high levels of foreign trade, strong financial institutions and sound policy that have given it the strongest sovereign rating in South America. Over the last decade, FDI has represented an annual average of over 6 percent of Chile’s GDP. Exports of goods and services accounted for approximately one-third of GDP, with commodities making up three-quarters of total exports. Copper provides 19% of government revenues. The mining sector attracts 50.1 % of implemented FDI under DL600, followed by services (26.6 %); electricity, gas and water (10.9 %); manufacturing (7.9 %); construction (2.4 %); transportation and communications (1.7 %); and agriculture and fishing (0.5 %). According to

Benefits for FDI in China 4.1 Economy is affected in many ways The benefits brought by FDI to China are apparent. Economy is influenced by FDI in a number of ways. FDI involves transfer knowledge in the host country, which will create an increase on the existing stock of knowledge through labor training, the transfer of skills, and the transferring of new managerial and organizational experience. Also, it can help local corporations to access to advanced technology by capital accumulation in host countries (Mello, 1999 and Mello, 1997). Furthermore, FDI may allow China to develop in technology and knowledge which are not readily available locally, as a consequent increase productivity growth through the economy (Jose, 2003).

Globalization and Global Marketplace in Costa Rica After a long history of dependence on a few traditional exports, followed by import substitution in the 1960s and 1970s, and a debt crisis in the early 1980s, Costa Rica launched an aggressive attempt at diversifying production and exports in 1985. The new approach to development consisted of two main elements: pursuit of free trade agreements and the attraction of foreign direct investment (FDI). Costa Rica has been remarkably successful in attracting FDI. It is the only country in Latin America where most FDI has gone to manufacturing over the last decade, and it stands out even further for its ability to attract FDI in high-tech sectors.

The most apparent benefit for nations that choose to enter into Free-trade Agreements with the United States is investment. For Latin American nations seeking to build wealth and inspire innovation, foreign investment can be a major game changer. Unsurprisingly, the United States exports and imports far more products from nations with free-trade agreements in place than from Non-FTA countries. Despite the recent downward trend in the value of U.S. currency, American investment continues to have dramatic effects on the growth of partner nations. For instance, in Chile their particular free-trade agreement is projected to increase economic growth by half a percentage point, a modest but meaningful impact. Not to mention the three months following the entry of the U.S.-Chile Free Trade Agreement, total U.S. exports to

Mexico PEST Analysis Executive Summary Mexico has resulted in recent years as one of the most promising emerging economics nevertheless the downturn occurred in 2009 under the influence of the crisis in the United States. In 2010 the economy has restarted its growth trend, which according to the forecast will bring the

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)

FOREIGN DIRECT INVESTMENT IN MEXICO (FDI) INTRODUCTION Mexico is the top trading nation in Latin America and the ninth-largest economy in the world. No country has signed more free trade agreements – 33 in all, including the two biggest markets in the world, the US and the EU. Altogether these signatory countries make up a preferential market of over more than billion consumers. Much of the FDI in Mexico is attracted by the country’s strategic location within the North American Free Trade Agreement, which has positioned it as a springboard to the US and Canada. Other attractions are competitive production costs and a young, skilled workforce, together with political stability and an open economy.

The authors first outline the theoretical rationale for their case. They make the point that inbound technology transfer, for example, can help to improve the knowledge and capabilities of all firms within the country, creating a multiplier effect whereby the foreign direct investment has broad social benefits that extend far beyond the initial area of investment. Such knowledge would therefore be considered a public good, the authors contend, and that there is a price that can be paid to acquire such a public good.

that the reliant variable is affirmatively altered by commercial factors. Saltz (1992) examined the result of FDI on commercial development for the third globe countries. His explanations concur alongside those of Bos, Sanders and Secchi (1974), that the level of output of a host state will stagnate in cases of FDI whereas there could transpire monopolisation and pricing transfers, that will cause under-utilisation of labor, that will cause a lag in the level of internal consumption demand and in the end will lead development to stagnate. Barrell and Pain (1999) discovered the benefits of FDI by U.S. multinationals in four European Coalition states and discovered that FDI could alter the host country’s presentation affirmatively in cases whereas there are transfers of knowledge and vision nevertheless the FDI to the host economy. Carkovic and Levine (2002) endeavored to reassess the connection amid FDI and commercial development for 72 states above the era 1960-1995. Their aftermath indicated that for both industrialized and growing economies FDI inflows did not exert an autonomous impact on commercial growth. Specifically the exogenous constituent of FDI did not exert a reliable affirmative encounter on commercial development, even permitting for the level of education, the level of commercial progress, the level of commercial progress and transactions openness of the recipient country. Brada,

McCalman (2005) tested the endogenous model for 27 most developed countries. Findings of the study showed that, in the short run majority of the countries looses due to a distribution of wealth to foreign owners of technology. However in the long run, when the TRIPS1 provided incentives to research efforts, all countries benefited. Smith (2001) examined the simultaneous impact of IPR protection on United States exports, affiliated sales and licenses to unaffiliated foreign firms in a sample of 50 developed and developing countries using a variant of the gravity equation. Results suggested that strong IPR protection increases the benefits of locating abroad and leads to increase in affiliate sales and licensing relative to exports, particularly in countries with strong initiative abilities.

In recent times, there has been increased attention devoted to the role that foreign direct in-vestment (FDI) could play in ameliorating the general dearth of capital available for investment in most developing countries. Even though FDI is primarily meant to bridge the gap between the desired level of gross national investment and the prevailing amount of domestic savings and in-vestment, it also results in positive externalities that often serve as a catalyst in the overall eco-nomic growth and development of the country that receives it. The inflow of FDI is known to yield indirect benefits, such as enhanced employment opportunities, the improvement of the bal-ance of payments (BOP) account situation due to the increased availability of foreign exchange in an economy, and perhaps, most importantly, the prospect of the transfer of technology, manageri-al skills and other intangible knowledge to the host country which would allow domestic firms to improve their collective profitability and performance (Elijah, 2006).

The second objective of this is paper is to briefly discuss the sources of the FDI flowing into the Caribbean region. . Most of the information was collected from the Economic Commission of Latin America and the Caribbean as it is the leading source of information on investment in the region. Foreign Direct Investment into the Caribbean comes from all over the world and not from just the United Kingdom and the United States of America as most would expect. Canada as well as Latin American countries have begun to increase their investments in the region. Additionally, investments originating from the Asia have also been expanding over time with countries such as Japan and Korea capitalizing in the industrial sectors. Additionally, as relationships between China and the English- speaking Caribbean deepen and strengthen, the FDI inflow into the region from China has also multiplied. There is some presence of Indian investment but this is predominantly in countries with a high concentration of Indian descendants such as Trinidad and Tobago. Baroda Bank (India’s International Bank) located in both Trinidad and Tobago as well as the Bahamas is the largest Indian investor but there are other small companies operating as well (ECLAC 2012).