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FDI, regional integration

Discussion Questions
1. Firms should not be investing abroad when there is a need for investment to create jobs at home. Discuss.
2. Do you think the successful conclusion of a multilateral agreement to liberalize regulations regarding FDI will benefit the world economy? Why?
3. What are the economic and political arguments for regional economic integration? Given these arguments, why don't we see more integration in the world economy?
4. How should a firm that has self-sufficient production facilities to in several EU countries respond to the creation of a single market? What are the constraints?

Solution Preview

1. Firms should not be investing abroad when there is a need for investment to create jobs at home. Discuss.

Even if there is a need for investment in the home country, firms do need to invest outside their home countries to take advantage of comparative advantage present outside their own countries or to explore new markets. Many a times, investment opportunities outside the country are far more attractive than domestic investments and thus, for-profit corporations need to take overseas investment decisions in the best interest of the stakeholders.

2. Do you think the successful conclusion of a multilateral agreement to liberalize regulations regarding FDI will benefit the world economy? Why?

Yes, it will definitely benefit the world economy by allowing free trade among nations and transferring wealth from developed nations to ...

Solution Summary

Firms should not be investing abroad when there is a need for investment to create jobs at home. Discuss.

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