International Business: Competing in the Global Marketplace
12th Edition
ISBN: 9781259929441
Author: Charles W. L. Hill Dr, G. Tomas M. Hult
Publisher: McGraw-Hill Education
expand_more
expand_more
format_list_bulleted
Question
Chapter 8, Problem 1CTD
Summary Introduction
To discuss: The difference in the percentage in foreign direct investment (FDI) inflows in Country I and Country J.
Introduction:
Gross fixed capital formation is the investment in the fixed assets like warehouses, retail stores, and factories.
Expert Solution & Answer
Explanation of Solution
The difference in the percentage in foreign direct investment (FDI) inflows in Country I and Country J are as follows:
The difference in the percentage in foreign direct investment (FDI) inflows in Country I and Country J mainly because of the government policies
Country I is basically a friendly FDI whereas Country J is not as such kind. Country J does not encourage inward FDI. Though these two countries are trade dependent economies with limited available resources Country I is comparable less mercantile in attitude with that of Country J. Country I has relatively low cost workforce, ample supply of labor and well educated.
Whereas work force of Country J is well educated is more expensive than the Country I.
Want to see more full solutions like this?
Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!
Students have asked these similar questions
Introduction to Foreign Exchange Market: Provide an overview of the foreign exchange market and its significance in international business. Your International business is an Oil Company Located in Saudi Arabia
1a. Explain how the foreign exchange market is structured. Discuss key participants, such as banks, corporations, and central banks, and the mechanisms involved in currency exchange.
1b. Identify the currency used in your country. Explain the exchange rate and how it compares to the US dollar.
Which of the following is true about the IMF and World Bank?
a. More than 190 countries participate as members of the IMF.
b. They aid in dollarizing the economies of foreign nations.
c. The IMF lends money to all types of countries, including advanced, emerging, and developing economies.
d. The IMF provides loaner currency to countries experiencing hardship.
Which of the following payment types offers payment protection to both exporters and importers, as the importer’s bank writes a guarantee of payment?
a. A commercial letter of credit
b. Payment in advance
c. A syndicate
d. A banker’s acceptance
The supply chains of global businesses such as Boeing, Ford, United Airlines, and the pharmaceutical companies Merck and Pfizer are known as which type of supply chain?
a. Enterprise
b. Telecommunication
c. Global
d.…
Developing countries are the main destinations of FDI which comes largely from the developed economies.
True
False
Chapter 8 Solutions
International Business: Competing in the Global Marketplace
Knowledge Booster
Similar questions
- There was a noticeable jump in the annual Chinese foreign direct investment (FDI) in Latin America and the Caribbean (LAC) in and since the year 2010. While the annual Chinese FDI was around $5 billion before 2010, it has gone up to $72.5 billion in the last seven years. In the year 2017, China was the largest investor in the LAC in terms of mergers and acquisitions deals of around $18 billion dollars. Between 2005 – 2017, Brazil, Peru, Argentina, Ecuador and Venezuela were top five LAC destinations for the Chinese FDI. Some of the largest acquisitions include Repsol in Brazil (Oil industry), Las Bambas Mine in Peru (Mining industry), Petrogal Brasil in Brazil (Oil industry), Bridas in Argentia (Oil industry), etc. Within the Caribbean, the Alpart Alumina Refinery in Jamaica was sold for US$299 million to the Jiuquan Iron and Steel Company (JISCo). Trinidad & Tobago, along with other Caribbean nations have signed up for the famous “Belt and Road Initiative” of the People’s Republic…arrow_forwardFor every part of this question, assume the reasonable national goals of long term economic growth and business cycle stabilization: a) Discuss a few of the benefits of using the West African franc (WAF). How do these advantages overcome other problems (that occur elsewhere in Africa), where the WAF is not used. b)The WAF currency board is based in Dakar, Senegal. What actions must be taken by the currency board, to guarantee the benefits, discussed in part A? Why is any cheating by the currency board impossible? c) All governments must make tradeoffs. As a result, some people will disagree with their own government. What are some of the identifiable disadvantages of using the WAF? How do these problems occur?arrow_forwardList 10 ways the international monetary fund will exploit its weakness with its strength?arrow_forward
- Due to their rapid expansion to foreign markets the process is sometimes referred to as the “McDonaldization” of new markets. Which market entry strategy is McDonald’s Corporation using in those countries where local governments do not allow 100% foreign funded enterprises?arrow_forwardThe international monetary fund was created through the Bretton Woods agreement as the way to monitor the foreign exchange systems and lend money to developing economies. True Falsearrow_forwardDiscuss at least 10 IMF conditions that must be satisfied by a country with BOP deficit and wishing to borrow money from it?arrow_forward
- You are working for a company that is considering investing in a foreign country. Investing in countries with different traditions is an important element of your company’s long-term strategic goals. As such, management has requested a report regarding the attractiveness of alternative countries based on the potential return of FDI. Write your report to discuss how you would measure country attractive and eventually making a investment choice in a particular country.arrow_forwardWhat adjustments might be made to the domestic cost of capital for a foreign investmentdue to exchange rate risk, political risk, and country risk?arrow_forwardIf your firm is considering investing in Russia, however, after learning that BP's investment is suffering from Ukraine-related sanctions, identify at least 2 reasons why you may want to invest in Russia anyway.arrow_forward
- For the independent nation Eireland in 2019, if GDP = €356.1bn, C = €111.6bn, G = €34.8bn, X = €448.9bn, M = €405.1bn, and with a statistical discrepancy equal to €2bn, then Gross Domestic Fixed Capital Formation is equal to not enough information available €191.1bn €161.9bn €163.9bnarrow_forwardEconomics 4. Foreign direct investment (FDI) comes with certain risks. In the case of Russia, Putin's decision to invade Ukraine has resulted in the seizure of assets in the United States that are owned by sanctioned Russian oligarchs. The US has also prohibited transactions with Russia's central banks. The actions of the US in this example reflect which political view of FDI? A. Radical view B. Market failure view C. Free market view D. Pragmatic nationalismarrow_forwardExamine the criteria that distinguish FDI from other forms of international investment.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Foundations of Business (MindTap Course List)MarketingISBN:9781337386920Author:William M. Pride, Robert J. Hughes, Jack R. KapoorPublisher:Cengage Learning
Foundations of Business - Standalone book (MindTa...MarketingISBN:9781285193946Author:William M. Pride, Robert J. Hughes, Jack R. KapoorPublisher:Cengage Learning
Foundations of Business (MindTap Course List)
Marketing
ISBN:9781337386920
Author:William M. Pride, Robert J. Hughes, Jack R. Kapoor
Publisher:Cengage Learning
Foundations of Business - Standalone book (MindTa...
Marketing
ISBN:9781285193946
Author:William M. Pride, Robert J. Hughes, Jack R. Kapoor
Publisher:Cengage Learning