Need help with my Business question – I’m studying for my class.
Reply to both the following two posts with a minimum of 300 words each reply and two references each reply in APA format. The replies must be split into two individual replies with their own word count and references.
Foreign Direct Investment (FDI) has proven to be resilient during financial crisis (Loungani & Razin 2001). Moreover, it canceled many developing countries to regard it as the private capital in flow of choice. Furthermore, although there is no substantial evidence e that such investment benefits host countries, they should assess its potential impact carefully and realistically (Loungani & Razin 2001). For instance, in East Asian countries such investments were remarkably stable during the global financial crisis of 1997-98.
At the same time this resilience could leads many developing countries to favor FDI over other forms of capital flows. Furthering a trend that has been in evidence for many years (Loungani & Razin 2005). Equally important, economists tend to favor the flow of capital across national borders because it allows capital to seek out the highest rate of return (Lougani & Razin 2005). Additionally, unrestricted capital flows may also offer several other advantages as noted by Loungani & Razin 2005). Besides, first international flows of capital reduce the risk faced by owners of capital by allowing them to diversity their lending and investment. Secondly, the global integration of capital markers can contribute to the spread of bestpractic4s in corporate governance accounting rules and legal traditions. Third, the global mobility of capital limits the ability of governments to pursue bad policies (Loungani & Razin 2005).
Suehrer (2019) contended that a publicized as a global call for action in 2015, the United Nations General Assembly passed a resolution on the sustainable development goals 2030 ( SDGs) in 2015, t6he United Nations Conference on Trade and Development ( UNCTAD) has already identified in 2014, as part of their World Investment Report that especially developing countries are facing an estimated USD 2.5 trillion funding gap annually to achieve the SDGs ( Suehrer 2019). Despite, that Foreign Direct Investments (FDI) are key driver to sustainable economic growth and prosperity of a nation, policies, and as holistic framework linking the 2030 agenda to actionable investment opportunities for private investors are missing (Suehrer 2019)
However, sustainability has become a relevant strategic business factor especially for foreign direct investments (FDIs) especially in developing countries and emerging markets the potential for those impact investments is significant (Suehrer 2019).
Loungani, P., Razin, A. (2005) How Beneficial is Foreign Direct Investment for Developing Countries? Finance & Development 38, (2) A Quarterly Magazine of the IMF
Suehrer, J. (2019) The Future of FDI: Achieving the Sustainable Development Goals 2030 Through Impact Investment /Dubai Investment Development Agency 10 (3) Global Policy
The Foreign Direct Investment (FDI) is a significant impact for the economy growth in the developing countries such us Algeria, Ghana, Botswana, Zimbabwe in Africa or Peru, Ecuador, or Nicaragua in South America among others. FDI from these developing countries has climbed abruptly over the last years (HarunaDanja, 2012). The FDI benefits those countries in a way that there is an improve to the work force skills, increased productivities as well as create better paying jobs. Let’s look at Nigeria for example; recent researches reveal the positive contribution from FDI to the economy growth (Akinlo, 2004). It is a risky country when it comes to investment however the agricultural activities have grown mainly with the production of Yam, Irish and sweet Potatoes, ground nuts and maize (HarunaDanja, 2012). As for Africa on the other hand, outward for FDI will be limited due to the lack of research and advertising of their products name brand apart from South Africa.
According to Singh & Jun (1999) the world bank stated the exitance of some determinant’s factors of the FDI such as political risk, business conditions, macroeconomic variable influencing the investment for those developing countries of South America and Europe. The findings of Kok and Ersoy, (2009) demonstrate that the most important factor is the communication variable. In the case of the Latin American countries, the FDI attraction particularly in Peru because of its abundance natural resources. However due to many factors against the country, Peru did not get to be the main attraction to the FDI (Metaxas & Kechagia, 2016). Studies conducted reveal that Peru as well as other Latin American countries did not manage to become the high classified country in FDI inflows. In the case of Peru, all is mainly because of the political and financial reforms imposed by the Peruvian government.
Furthermore, the market structure and human capital conditions are more to be important for a positive effect of the FDI on the economy growth for those developing countries. Singh & Jun (1999) reveals that trade flows are proven to have linked to FDI while it is encouraging the promotion for export and import substitution or grater trade with producers from those developing countries. The FDI flow is the main dynamic of the globalization phenomenon therefore FDI flow purposes will contribute to the countries’ development of political expansion. According to Singh & Jun (1999) the consideration for the developing countries as both sources and recipients of the FDI will prove the ability for them not only to fascinate private investment but to retain and leverage it for inclusive and sustainable growth.
Akinlo, A. E. (2004) “Foreign Direct Investment and Growth in Nigeria: An Empirical Investigation.” Journal of Policy Modeling. (26) 5 627-639
HarunaDanja, K. (2012). Foreign direct investment and the Nigerian economy. American journal of economics, 2(3), 33-40.
Kok, R. and Acikgoz Ersoy, B. (2009), “Analyses of FDI determinants in developing countries”, International Journal of Social Economics, Vol. 36 No. 1/2, pp. 105-123. https://doi.org/10.1108/03068290910921226
Metaxas, T., & Kechagia, P. (2016). FOREIGN DIRECT INVESTMENT IN LATIN AMERICA: THE CASE OF PERU. Theoretical and Practical Research in Economic Fields, 7(2), 160-173. doi:http://dx.doi.org/10.14505/tpref.v7.2(14).05
Singh, H., & Jun, K. W. (1999). Some new evidence on determinants of foreign direct investment in developing countries. The World Bank.
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