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International Business Management - FDI

International Business Management

1. What is the ultimate goal of regional economic integration? Identify three potential benefits of regional economic integration and three potential drawbacks.

2. What is foreign direct investment? Identify at least three motivations behind a company's decision to engage in FDI.

3. What types of policies might a country have in place to be called neo-mercantilist? Provide examples.

4. Define and provide specific country examples of a centrally planned economy, mixed economy and a market economy.

Solution Preview

1. What is the ultimate goal of regional economic integration? Identify three potential benefits of regional economic integration and three potential drawbacks.

The ultimate goal of regional economic integration is to establish common economic space and coordinate economic policy in a number of fields.

Potential Benefits

1. The regional integration would promote active economic exchange within a region, and might benefit the region by the scale of economies and a more effective utilization of resources that could not previously be attained by a single country.
2. If goods are sufficiently strong substitutes, regional trade agreements will cause the demand for third party goods to decrease, which will drive down prices. In addition, more acute competition in the trade zone may induce outside firms to cut prices to maintain exports to the region.
3. Regional trade agreements may attract FDI both from within and ...

Solution Summary

This solution is comprised of a detailed explanation to answer the international business management questions in more than 400 words of text.

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