Morocco: an Assessment of Opportunities and Risks for Foreign Direct Investment

Many governments, especially in industrialized and developed nations, pay very close attention to foreign direct investment because the investment flows into and out of their economies can and does have a significant impact.

Located in Central Europe, Switzerland is known for its natural beauty, chocolate, banks, neutral stance on global politics and hosts the worlds most innovative hub. Switzerland has a track record for attracting global organizations and a variety of industries. Switzerland offers beneficial opportunities for their citizens and the global organizations with no discrimination. This is a very unique model that Switzerland upholds within the fabric of its country. Let’s take a walk thru and analyze the risks in Switzerland; with a focus on the Political Stability, Economic Factors, Subjective Factors, Laws and Regulations and Capital Flight. This paper will breakdown a colorful analysis for multinational corporations deciding to invest Switzerland.

Three major types of political risk discourage foreign investment since they damage its profitability and survival: first, nationalization or expropriation of foreign assets, which tends to be rare, and breach of contract, which occurs more often, threaten foreign investment; second, policy instability and arbitrary regulation in FDI-related policies create uncertain investment environments and hurt the profitability of foreign investments; and, third, war and political violence, including terrorist

Globalisation is likely to produce significant effects on the flows of direct investments between countries. FDI is defined as the investment between countries (normally by private sectors). It tends to involve establishing operations. It also includes stakes in various other businesses. FDI is considered extremely important, specifically for economies in need for recovery, such as the Tunisian economy that has been in decay since the revolution of 2011. The instability associated of the revolution has led to a decline in the inflow of direct investments into the country. However, it is believed that this decline however is not expected to continue, especially as the government is trying to improve the business environment, remarkably through the launch of new infrastructure projects within the country. It has been stated by many economists, that attracting more FDI can promote positive spill-overs to the economy. I think that Tunisia will eventually succeed in attracting more FDI, which will have a positive effect on the productive sectors of the economy. Taking Tunisia’s automotive and aerospace sectors for example, they managed to demonstrate small and medium suppliers to multinational companies that would have an opportunity to not only absorb technology, but

Multinational enterprises (MNEs) like Bata must operate in countries with different political and legal conditions, so the political impact on the foreign investments is very important. This paper explains this issue based on the Bata case in three parts. The first part evaluates the different ways in which Bata has interacted with foreign political systems in its investments and operations aboard. In the second part, the advantages and disadvantages, which MNEs bring to their company and the host-country when doing foreign direct investment, are analyzed relating to

Foreign Direct Investment (FDI) improved from 6.5% of the world’s GDP in 1980 to 31.8% in 2006.

Economic growth and benefits of foreign direct investment depend on factors such as the industry and the learning curve. Foreign direct investment (FDI) is, “a controlling ownership in a business enterprise in one country by an entity based in another country.” [1] There are three strategic types of FDI: Horizontal FDI, Platform FDI, and Vertical FDI. The horizontal FDI is, “when a firms duplicates its home country-based activates at the same value chain in a host country through FDI. Platform FDI occurs when “foreign direct investment from a source country into a destination country for the purpose of exporting to a third country. Vertical FDI “takes place when a firm through FDI moves upstream or downstream in different value chains i.e., when firms perform value-adding activities stage by stage in a vertical fashion in a host country.”[1] It is a common belief that FDI increases local growth (economic development); and the benefits come from transfer for technology and management know-how, introduction of new processes, and employee training. [2]

FDI can make a positive contribution to a host economy by supplying capital, technology and management resources that would otherwise not be available. Such resource

Ekpo, A.H. (1995) investigated that the element like higher gain from investment, low labor and production cost, political stability, enduring investment climate, official infrastructure facilities and helpful regulatory atmosphere also serve to invite and guard FDI in the host country.Chadee and Schlichting (1997) investigated some of the aspects of FDI in the

The factors involved in process of economic growth of nations have transformed overtime, from savings to trade, foreign investment and human capital base of the country. With opening up of the economies and the formation of multiple agreements among the countries, trade and FDI have become the major medium of accord among the economies. There has been surge in FDI inflows ever since the countries adopted liberalisation policies across the globe. The countries have been looking for policies to attract more FDI by boosting investment climate in their countries, to finance their process of growth and development.

FDI is where the MNE invests directly in production or other facilities over which it has effective control in a host economy (j &t). According to Pollan (), the definition of the terms “investment” is highly significant to Foreign Direct Investment, which can be typical comprehend as the conveyance of capital to a country. Investment can be defined as money committed or property acquired in order to gain profitable returns, as interest, future income or appreciation in value (business dictionary, 2014). The commonest definition used to understand the idea of FDI is the definition provided by International Monetary Fund’s (IMF). The IMF definition of FDI introduces systems and structures which clearly demarcates foreign direct investment from portfolio investment. According to the IMF, direct investment creates a lasting interest in an enterprise, consisting of a long-term relationship between the investor and the enterprise and that the investor has an outstanding amount of control on the management of the enterprise, while portfolio investment does not create an extended relationship and the portfolio investor is rarely directly partaking in the day-to-day management of the enterprise (Pollan,). FDI however has no comprehensive, authoritative and ubiquitous legal definition and the test for the existence of enough degree of control differs in scope depending on applicable law in a

The unpredictability of autonomous FDI flows, in both scale and direction, has generated a substantial research effort to identify their major determinants. The remainder of this paper is mainly concerned with examining the factors influencing the destination of the investment: Host-country determinants, rather than industry specific factors. The major determinants of FDI are as follows---

The advent of globalisation has influenced the scope of economic growth for countries in a rapid manner. It has also notified that with globalisation, the business sector has been able to experience considerable benefits from international domain. The concept of Foreign Direct Investment (FDI) has been gain huge prominences in the recent years for getting considerable benefits for the economy and overall development of a nation. The importance of FDI has been attaining huge prominences among the economic as well as business domain. FDI is one kind of investment that influences the overall economic functioning within a country. FDI is mainly accompanied by multinational companies (MNCs)

Arguments supporting FDI in developing countries suggest that recipient countries need to fulfill some preconditions to create a favorable business environment. It has certain advantages to both the host country and the investor. Host countries’ macroeconomic policy, tax regime, regulatory practices are critical determinants for attracting FDI.

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.