Assignment- FDI: Risks and Benefits

Focus on the patterns of foreign direct investment (FDI) between countries and the extent to which governments can control or influence a firm's decision to invest in their country. Taken together, these readings paint a picture of the benefits and risks of FDI.

To prepare for this Discussion, begin by selecting a pair of countries from the list below. Then, pay attention to both the nature and history of the FDI, the benefits and risks associated with using an FDI entry strategy, and the risks and benefits to and for both countries.

• China and Brazil
• United States and Mexico
• India and United States or Canada
• Germany and Ireland
• France and Morocco or Algeria
• China and Japan or South Korea
• Intra South American-two or more countries in the region

Post the following:

• Assess the nature and history of FDI between the country pair. Support your assessment using one or more of the international trade theories introduced.

• Next, outline the benefits and risks associated with using an FDI entry strategy in the recipient country. Also explain current international trade patterns and the factors that influence international trade.

• What are the risks and benefits for both the organization making the investment and the country receiving it?

• What type of production or other facility would you suggest be built using the FDI?

• In what ways will the FDI affect international trade? Use one or more of the trade theories introduced in Chapter 6 of your text to support your answer.

• What would the effects be on exports from the host country and imports or parts and resources for the facility?

• Conclude with an assessment of whether you would recommend FDI as an entry or expansion strategy for the particular country pair and industry examined.