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- Provide two ways in which the criteria for investing differ between Foreign DirectInvestment and Foreign Portfolio Investment?Peru is growing relatively quickly and has begun to attract large inflows of foreign direct investment. While Peru relishes the benefit of the inflows, it is concerned about the potential negative effects if the foreign investors pull out their investments quickly. One particular reason for Peru to be concerned is that its banks have taken out large loans denominated in U.S. dollars and European euros from foreign banks. If the foreign direct investment is withdrawn quickly from Peru, what will be the effect on each of these items? A. Peru's money supply - B. Peru's exchange rate with other countries - C. Peru's exports - D. Peru's trade deficit - Answer Bank: No Effect, Increase or DecreaseOther things equal, countries that offer investors higher rates of return attract more capital than countries that offer lower rates. True False
- Explain four factors why China is among the huge recipients of foreign direct investment.Identify any patterns or discrepancies as well as any positive, negative or neutral relationships between Foreign Direct Investment and Export growth in Africa between 2019 - 2023. Suggest how this might influence its impact on export growth, highlight any methodological strengths and weaknesses and discuss if the findings are consistent or if there are significant discrepancies that need further investigation. Identify any gaps and suggest areas for future research.If you were a foreign investor, would you want to invest in a consumer electronics company in Japan? Does the fact that the company has had past problems requiring government intervention affect your initial decision? How does it impact your decision that you would be competing with a government-backed company during the bid process?
- Foreign direct investment tends to be inexpensive, but it gives companies very little control of business operations in a foreign country. True or falseAssume that you are a senior manager in a U.S. automobile company considering investing in production facilities in China, Russia or Germany. These facilities will serve the local market demand. Evaluate the benefits, costs, and risks associated with doing business in each nation. Which country seems to be the most attractive target for foreign direct investment? Why?Provide two ways in which the criteria for investing differ between Foreign Direct Investment and Foreign Portfolio Investment?
- ASSESS HOW FIRMS CAN REDUCE THEIR COST OF CAPITAL BY TAPPING INTO MORE DEVELOPED FOREIGN CAPITAL MARKETSWhich of the following statements does not belong to the main benefits of foreign direct investment (FDI)? FDI creates new jobs and boosts government tax revenues. FDI creates positive knowledge spillovers. FDI brings competition and improves efficiency. FDI makes local firms more difficult to survive and thus destroys local jobs.Explain how government incentives can have an impact on multinational capital budgeting
