Welcome to the World of Sony - Unless the Yen Keeps Rising

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HOMEWORK OF IBM

FDI MOTIVES

ASSOC.PROF. Mahmut Arslan

PREPARED BY:

FEYZA KAYA 20312196

ZÜLFÜYE YILDIZ 20212354
CONTENTS

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CONTENTS ii
FDI MOTIVES 3 FOREIGN DIRECT INVESTMENT: 3 Types of FDI 4 Advantages of FDI 4 Motivations for FDI 6 Market-Expansion: Investments versus Trade 6 Resource-Acquisition Investment 8 Diversification-Oriented Investments 9 Political Motives 9
SOME EXAMPLES FOR FDI MOTIVES 9 Case: Bridgestone Tire Company 9 Foreign direct investment: a case study on Argentina 10 Case of Ireland 11 Case of Singopare: Foreign Direct Investment 13 Case of Mexico: Foreign Direct Investment 15 FDI MOTIVES IN TURKEY 18 THE
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FDI has a lot of benefits to home ad host country. These are in the following:
Advantages of FDI
Businesses and governments are motivated to engage in FDI in order to expand sales, acquire resources and minimize competitive risk. Governments may additionally be motivated by some desired political advantage.

Sales expansion objectives :
- Overcome high transportation costs
- Lack of domestic capacity
- Low gains from scale economies
- Trade restrictions
- Barriers because of country-origin effects (nationalism, product image, delivery risk)
- Lower production costs abroad
Resource acquisition objectives :
- Savings through vertical integration
- Savings through rationalized production
- Gain access to cheaper or different resources and knowledge
- Need for lower costs as product mature
- Gain governmental investment incentives
Risk minimization objectives :
- Diversification of customer base (same motivations as for sales expansion objectives)
- Diversification of supplier base (same motivations as for resource acquisition objectives)
- Following customers
- Preventing competitors ' advantage
Political objectives :
-Influence companies usually through factors under resource acquisition objectives.

And the benefits of FDI to Home and Host Country.
FDI Benefits
Host Country ■ Resource transfer effects ■ Supplying capital, technology & management resources ■ Employment effects ■ Brings jobs

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