IBUS2301 - Tutorial #4 - Chapter 8 - Foreign Direct Investment (FDI)
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The document provides an outline for a tutorial on foreign direct investment (FDI) in India, highlighting its benefits, costs, and alternatives. It discusses the low levels of inward FDI in India despite the country's large population and economy, presenting a debate between two student groups on whether India should increase its FDI or maintain current levels. Additionally, the document outlines alternatives to FDI, such as exporting and licensing, along with their limitations.
IBUS2301 - Tutorial #4 - Chapter 8 - Foreign Direct Investment (FDI)
- 1. IBUS2301: International Business Management Tutorial #4, March 31 and April 1 Chapter 8: Foreign Direct Investment (FDI) Tutor: Preston Teeter, p.teeter@business.uq.edu.au
- 2. IBUS2301: Int’l Business Mgmt Feedback on presentations Good • Professional • Informative • Supporting research • Time mgmt Improve • Crowded slides (Mon) • Too fast/reading • Simplify message • In-depth on few key points • Engage audience
- 3. IBUS2301: Int’l Business Mgmt Outline • FDI in India • Benefits and costs of FDI • Alternatives to FDI
- 4. IBUS2301: Int’l Business Mgmt FDI IN INDIA
- 5. IBUS2301: Int’l Business Mgmt FDI in India • 2 groups of students • 2 members of Cabinet of India • 7 minutes to prepare • 2 minutes to present
- 6. FDI in India Despite possessing the world’s 2nd largest population and 10th largest economy, India ranks relatively low on inward FDI. In 2010, India’s inward FDI was significantly lower than that in countries such as Poland, Austria, and Ireland. Group 1: You believe India should increase inward FDI. Explain why and how this should be done. Group 2: You believe India’s current level of FDI is suitable. Explain why. Also explain how restrictions should be maintained and/or enhanced.
- 7. IBUS2301: Int’l Business Mgmt BENEFITS AND COSTS OF FDI
- 8. IBUS2301: Int’l Business Mgmt FDI Benefits • Resource-transfer • Employment • Balance-of-payments • Competition and growth Costs • Sovereignty/Autonomy • Job transfers/not gains • Outflow of earnings and import of supplies • Unfair competition What are the host country benefits and costs of FDI?
- 9. Source: CIA World Factbook (URL in notes) Stock of FDI at home
- 10. Source: IHME (URL in notes) Gross domestic product (GDP) per capita, 1950-2015
- 11. Source: Business Standard (URL in notes)
- 12. Source: CFR (URL in notes)
- 13. IBUS2301: Int’l Business Mgmt ALTERNATIVES TO FDI
- 14. IBUS2301: Int’l Business Mgmt Alternatives to FDI What are two alternatives for conducting business in a foreign market? What are their limitations that make FDI attractive? • Exporting: produce at home, ship abroad – Limitations: transportation costs and trade barriers • Licensing: granting foreign entity right to produce and sell in return for royalty fee – Limitations: loss of knowledge to competitors, loss of control, and capabilities not amenable to licensing
- 15. Source: The Economic Times (URL in notes)
- 16. Source: thinkprogress.org (URL in notes)
- 17. Source: thinkprogress.org (URL in notes)
- 18. Source: The Badger Herald (URL in notes)
- 19. Questions?
Editor's Notes
- #17: http://thinkprogress.org/economy/2014/02/21/3319561/bangladesh-sample-inspections/#