International Business Essay Example | Topics and Well Written Essays - 2000 words - 8

International Business - Essay Example rategy is not always a beneficial means of investment and in this vein this essay will look at the effectiveness of the conditions in the Host countries which possibly attract FDI growth in relation to western and under developed countries and whether the data from large organisations like the World Bank is to be trusted in making competitive decisions about the FDI success and strategy.In this vein the question will discuss alternatively with examples whether the success factors for FDI hold true for some industries and may be disadvantageous to some industries. Foreign direct investment or FDI can be defined as an investment made to obtain long lasting shares or interest in out of country enterprises. There will always be a parent enterprise with some sort of a foreign affiliation the co-operation of whom would be known as a translational corporation (TNC) and the parent enterprise will have a 10% or more share control of its foreign affiliate. The Post World War II the position was that the US was dominating the world share of FDI by three quarters of the entire market share. The US at this point had around three-quarters of the Global FDI (1945 and 1960).However today in the age of globalisation the FDI is no longer a phenomena restricted to OECD countries. FDI growth is very important for the modern global economy with the FDI stocks now constituting over 20 percent of global GDP. Inward FDI happens when there is an investment of foreign capital within a country’s own local resources and can be attracted by tax holidays and tax s ubsidies, low rates of interest, and more investor friendly laws. However ownership restraints or differential performance requirements are likely to discourage FDI. Outward FDI is local investment in foreign resources and is encouraged by a positive role of the host governments in providing insurance and tax breaks for these people who want to trade abroad. Therefore â€Å"Foreign Direct Investment† can be both inwards and