Using any two of the four FDI theories [international product life cycle, market imperfections, eclectic, market power], explain why companies engage in foreign direct investment.
The FDI theory of international product life cycle holds that if he demands for a new product in other countries becomes significant; it becomes worthwhile for the innovating firm to set up production facilities in those countries. This leads to foreign direct investment. At the same time a firm may make ...
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Foreign Direct Investment (FDI)
Consider an investment in an international venture. Identify the advantages and disadvantages of this investment based upon the following:
- Forecasting the foreign currency exchange rate
- Interest rate parity and forecasting
- Foreign investment policies
- Government limitations on foreign investments
- Trade regulations and policies
- International finance regulations
Also additionally, identify the advantages and disadvantages of this investment based on the capital structure of the firm.View Full Posting Details