Foreign Direct Investment [FDI] - PowerPoint PPT Presentation

Loading...

PPT – Foreign Direct Investment [FDI] PowerPoint presentation | free to download - id: 429a7f-NDg3Z



Loading


The Adobe Flash plugin is needed to view this content

Get the plugin now

View by Category
About This Presentation
Title:

Foreign Direct Investment [FDI]

Description:

Foreign Direct Investment [FDI] What? Where? Why? Impacts * * Foreign Direct Investment [FDI] Discuss characteristics that attract businesses to invest in an emerging ... – PowerPoint PPT presentation

Number of Views:3164
Avg rating:3.0/5.0
Slides: 25
Provided by: RNPa5
Learn more at: http://community.edexcel.com
Category:

less

Write a Comment
User Comments (0)
Transcript and Presenter's Notes

Title: Foreign Direct Investment [FDI]


1
Foreign Direct Investment FDI
  • What?
  • Where?
  • Why?
  • Impacts

2
Foreign Direct Investment FDI
  • Discuss characteristics that attract
    businesses to invest in an emerging economy.
  • To what extent does FDI bring benefits to the
    host country?

3
Foreign Direct Investment
What?
  • Foreign direct investment (FDI) happens when a
    firm invests directly in facilities in a foreign
    country

4
Types of FDI
  • FDI types
  • Purchase of existing assets
  • New investment
  • Participation in an international joint-venture
    Shared ownership with local partner

What?
5
Foreign Direct Investment FDI
  • Case Study Singapore
  • Why did the government of Singapore want to
    encourage FDI?
  • What factors attracted business?

6
Foreign Direct Investment FDI
  • Search for resources
  • Search for markets
  • Search for efficiency
  • Search for assets

Why?
7
Foreign Direct Investment FDI
  • Search for resources
  • - labour availability and affordability
  • - educational attainment
  • Search for markets
  • Search for efficiency
  • Search for assets

Why?
8
Foreign Direct Investment FDI
  • Search for resources
  • Search for markets
  • - high population density
  • - strong demand
  • - to reduce the cost of supplying that market
  • Search for efficiency
  • Search for assets

Why?
9
Foreign Direct Investment FDI
  • Search for resources
  • Search for markets
  • Search for efficiency
  • - wage costs
  • - favourable government policy low taxation and
    little regulation
  • 4. Search for assets

Why?
10
Foreign Direct Investment FDI
  • Search for resources
  • Search for markets
  • Search for efficiency
  • Search for assets
  • - oilfields
  • - mines

Why?
11
  • What incentives are there for businesses
  • to invest in China/India?
  • incentives to invest in India
  • http//www.worldwide-tax.com/china/ind_invest.asp
  • http//www.worldwide-tax.com/india/ind_invest.asp

12
Foreign Direct Investment in China
2007 2008
Joint ventures 17 billion 19 billion
Foreign owned enterprises 58 billion 72 billion
Total FDI 75 billion 91 billion
13
Government Policy and FDI
Slide 6-13
  • Host country
  • Inward FDI encouragement
  • Investment incentives
  • Job creation incentives
  • Inward FDI restrictions
  • Ownership extent restrictions (national security
    local nationals can safeguard host countrys
    interests)

14
Major TNCs in INDIA
  • Telecom
  • ATT
  • Swiss Telecom
  • Deutsche Telekom AG
  • Motorola
  • STET International
  • Telesystem International
  • Telstra Corp
  • SIET International
  • Consumer Goods
  • Fosters
  • AB Electrolux
  • Kellogg
  • Nestle SA
  • Perfetti
  • Coca Cola
  • Pepsi
  • Auto Components
  • Denso Corporation
  • Graziano
  • Robert Bosch
  • Carraro
  • SIAP S.P.A
  • Toyota
  • Power
  • Power Gen
  • Siemens
  • ST Power System
  • Miscellaneous
  • Asea Brown Boveri
  • Buhler
  • Schindler
  • Italcementi
  • Cerestar Holding
  • Chemicals Pharma
  • AKZO NOBEL
  • CIBA India
  • Sinco Engg.
  • Bayer
  • EMS Inventa AG
  • Mining
  • Ashton
  • American Exploration
  • Rio Tinto
  • Oil Gas
  • Hardy Oil Gas
  • International Petroleum
  • SHV Energy
  • Unocal
  • Van Ommeren
  • Automobile
  • Fiat Auto
  • Daewoo
  • Daimler Benz
  • Ford
  • General Motors
  • Honda
  • Hyundai
  • Suzuki
  • Toyota
  • Volvo
  • Trading
  • Metro Cash Carry GMBH
  • FIDIA
  • Mitsubishi
  • SHV Macro

15
Attracting foreign capital into infrastructure
and export competitive sectors
Creating skilled employment opportunities
FDI
Make India an attractive location for more FDI
Promoting technology to enhance competitiveness
16
How India promotes itself
  • Worlds largest democracy
  • Second largest emerging market (US 2.4
    trillion)
  • Skilled and competitive labour force
  • Amongst the highest rates of return on
    investment
  • Large domestic market
  • Independent judiciary


17
Incentives
  • 10 year tax holiday for developers
  • 100 Tax holiday for 10 years for
    infrastructure undertakings
  • 100 tax deduction for 10 consecutive
    assessment years to undertakings providing
    Telecom services

18
Host Country Effects of FDI
  • Benefits
  • Costs

Impact?
19
Host Country Effects of FDI
  • Benefits
  • Resource -transfer
  • Employment circular flow
  • Balance-of-payment (BOP)
  • Import substitution
  • Source of export increase
  • Costs

Impact?
20
Host Country Effects of FDI
  • Benefits
  • Resource -transfer
  • Employment circular flow
  • Balance-of-payment (BOP)
  • Import substitution
  • Source of export increase
  • Costs
  • Adverse effects on the BOP
  • Capital inflow followed by capital outflow
    profits
  • Threat to national sovereignty and autonomy
  • Loss of economic independence

Impact?
21
Government Policy and FDI
  • The radical view inbound FDI harmful MNEs
  • The free market view FDI should be encouraged

Impact?
22
Government Policy and FDI
  • The free market view FDI should be encouraged
  • The radical view
  • inbound FDI harmful

Impact?
23
Government Policy and FDI
  • The free market view FDI should be encouraged
  • The radical view
  • inbound FDI harmful
  • TNCs
  • Are an instrument of imperialist domination
  • Exploit host to the advantage of home country
  • Extract profits from host country give nothing
    back
  • Keep LDCs backward/dependent for investment,
    technology and jobs

Impact?
24
Government Policy and FDI
  • The free market view FDI should be encouraged
  • international production should be distributed
    according to comparative advantage countries
    should specialize in what they do best
  • The TNC increases the world economy efficiency
  • The radical view
  • inbound FDI harmful
  • TNCs
  • Are an instrument of imperialist domination
  • Exploit host to the advantage of home country
  • Extract profits from host country give nothing
    back
  • Keep LDCs backward/dependent for investment,
    technology and jobs

Impact?
About PowerShow.com