310 lecture 9
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This document discusses foreign direct investment (FDI). It defines FDI as the inflow and stock of investment each year from one country to another. It notes that the Organization for Economic Cooperation and Development (OECD) tracks FDI among its 29 member countries. The document also summarizes that greenfield FDI, which establishes new operations, has become a larger percentage of total FDI compared to mergers and acquisitions. Finally, it outlines three choices for international business - exporting, licensing, or foreign direct investment - and provides brief limitations of exporting and licensing.
310 lecture 9
- 1. International Economics Lecture 9
- 3. Foreign Direct Investment FDI
- 4. Organization for Economic Development and Cooperation
- 5. Organization for Economic Development and Cooperation OEDC Paris 29 Countries
- 6. FDI
- 7. FDI Inflow - Each year Stock - Accumulation Outflow - Each year
- 8. FDI Year Inflow Outflow Stock 1 100 0 100 2 150 0 250 3 0 25 225 4 50 0 275
- 9. FDI - Two Types
- 10. FDI - Two Types Greenfield - New Mergers and Acquisitions
- 11. FDI 2001 2004 2008 Greenfield 22% 41% 60% M &A 78% 59% 40%
- 12. Why FDI?
- 14. Why Merger & Acquisition?
- 15. Why Merger & Acquisition? Quick Strategic Assets Improve Productivity
- 16. Three Choices
- 17. Three Choices Export License FDI
- 19. Limitations of Exporting Transportation Costs Value to Weight Ratio Trade Barriers
- 21. Limitations of Licensing Lose Technology Lose Mfg. & Mkt. Hard to license brand culture