The field of International Political Economy (IPE) have seen a tremendous amount continuous change in both the past and recent time. The climate and conditions within the theoretical and practical aspects of the field are ever-changing and have led to a volatile political and economic landscape to form. This essay will focus on one aspect of IPE that have relatively quickly risen to become imperatively influential and important for the developments in the field, that aspect is Multinational Companies (MNC) and their Foreign Direct Investments (FDI). MNC’s role and the importance of FDI are multifaceted within the international sphere; the use of FDI does not only constitute possible cuts in production cost and increased revenue for the investor but FDI is today an important aspect for state economies as well. FDI does today represent a large part of many states’ GDP and is also a vital part in progressing economic growth and development the developing world.
The dynamics of FDI are complex, the involved actors; MNC’s and state governments act within different perimeters. The aims and goals of the involved actors are not always in sync but the outcomes might be beneficial for both despite this. Numerous studies have throughout the time been conducted on the dynamics of FDI. This essay will focus on the role of domestic and international institutions in relation to FDI. What role does institutions plays in attracting FDI, does certain types of institutions succeed in attracting more FDI than others and why the situation is so, are central questions to assess to understand the relations of MNC’s, FDI and states. The analysis will focus on three different dimensions of...
... middle of paper ...
FDI Inflows, Russian Federation. Available at: http://www.oecd-ilibrary.org/economics/country-statistical-profile-russian-federation_20752288-table-rus [accessed 14 January 2014]
OECD Country Risk Classifications of the Participants to the Arrangement on Officially Supported Export Credits. Available from: http://www.oecd.org/tad/xcred/cre-crc-current-english.pdf [accessed January 15 2014]
FDI Inflows, Available from: http://unctadstat.unctad.org/TableViewer/tableView.aspx [accessed January 17 2014]
World Bank Statistics
Statistics of FDI Inflows. Available from: http://data.worldbank.org/indicator/BX.KLT.DINV.CD.WD [accessed January 14 2014]
Brunei | Freedom House. 2014 [ONLINE] Available at: http://www.freedomhouse.org/report/freedom-world/2008/brunei#.UtqTsM-vncc. [Accessed 16 January 2014].
Need Writing Help?
Get feedback on grammar, clarity, concision and logic instantly.Check your paper »
- ... However, a term called “Benedict Arnold” is used to explain why some corporations move American jobs offshore to benefit from lower wages and tax rates (Jensen 53). From a Marxist perspective, this would essentially be a mechanism used to exploit the markets in developing nations (North) because of the lower wages and tax rates available compared to the rates used in developed countries (South). This chapter is significant because it highlights the trivial impact that government spending and government taxation have on the decision-making process in terms of investments and FDI inflows.... [tags: Multinational corporation, Corporation]
878 words (2.5 pages)
- 1.1 Transnational corporations in the global economy and the direct foreign investment paradigm Transnational corporations (TCs) have been at the forefront of globalization processes and world economic transformations since 1970s. Although the literature on TCs emergence and evolution is extensive and diverse, ranging from the classic theory of the firm (Williamson, 1979) to the broad field of international political economy (Gilpin, 2001: 278), is widely accepted and recognized the fact that transnational corporations have played a key role in global trade expansion and the consolidation of foreign direct investment and capital flows paradigms (Moran, 2001: 3).... [tags: Investment, Economics, International economics]
1124 words (3.2 pages)
- The Impact of recent political changes in India on Direct Foreign Investments (DFI) Levels. Introduction: Foreign direct investment (FDI) is process of controlling ownership of business enterprises inside one country against an entity based business enterprise in another country for trading aspect. Foreign direct investments mainly include, building new facilities in other country, to expand their business by investing their new earned profits and try to acquire new mergers and acquisitions. Foreign Direct Investments work towards, building new facilities in other country for expansion of one’s established business in their respective country.... [tags: Foreign direct investment, Investment]
1482 words (4.2 pages)
- Foreign direct investment (FDI) is becoming a growing global trend undertaken by companies in order to expand their business into multiple countries as well as their domestic base. FDIs have increased across the world over the past 20 years, with outflows of US$241,863m in 1990 to US$2,171,384m in 2007, just before the global financial crisis, an increase of around 837% (OECD, 2014). This essay will look into why certain countries attract more foreign investment than others by looking at a variety of factors, including the growth rates of economies, access to natural resources, political stability, the risks of setting up in a country and more.... [tags: global trend, business, domestic base]
1000 words (2.9 pages)
- ... Frankie Chau, Rataporn Deesomsak and Jun Wang, “Political uncertainty and stock market volatility in the Middle East and North African (MENA) Countries”, Journal of International Financial Markets, Institutions & Money 28 (2014). The study found the following main results: - Changes in the level of political risk increase the volatility of Islamic indices while their effect on the volatility in conventional markets is insignificant. - The effect of political changes on the integration of MENA markets with international markets is insignifi8cant.... [tags: Investment, Economics, Macroeconomics, Risk]
1517 words (4.3 pages)
- As a city, London forms the capital of the world’s fifth largest economy (The World Bank, 2016). Dating from Roman times, it is described as one of only a handful of global centres, matched by cities such as New York and Tokyo. Greater London is home to 8.61 million people (London Datastore, 2016), with much of Britain’s administration and government located within its limits. Once the largest port in the world and a major manufacturing hub, finance has always played an import part in London’s economy due to Britain’s significance as a trading nation.... [tags: Investment, Foreign direct investment]
838 words (2.4 pages)
- Institutions and the Global Marketplace Institutions are the parameters placed and enforced on a society to define acceptable behavior and interaction, also known as rules of the game (North, 1991). Institutional frameworks have two facets one formal the other informal. Formal rules are those imposed on a society by the state or ruling body, which has the authority to administer the rules. Informal institutions are the constraints placed on a society that are found in their “norms, culture, and ethics” (Peng M.... [tags: rules, risk, business]
705 words (2 pages)
- Foreign Direct Investment ( FDI) is a source that a country obtain from other countries in order to add value for it’s own economy. These sources can be various: Economic or technological. Foreign Investors may establish a new facility or open their branch or establish a partnership with a local company in host country. Nowadays, there is more demand of FDI’s than the world trade and world output. This drastic rise in FDI is due to the help of changing potentials and economic policies that are happening in the developing countries worldwide (Alesina and Dollar, 2000).Investors are more likely to invest their money on more profitable places,it would not be reasonable for companies to inve... [tags: Investment, Foreign direct investment]
1689 words (4.8 pages)
- Concept: Foreign Direct Investment (FDI) Flow of money for the purpose of investments from one country to another country is called as Foreign Direct Investments. It is an investment made by a company based in one country for long lasting interest or controlling stake into a company in a foreign country. The nature of FDI could be either be inward or outward. Inward FDI refers to direct investments flowing into the home country from foreign land, and outward FDI refers to home country making direct investments in foreign land.... [tags: Foreign direct investment, Investment]
1785 words (5.1 pages)
- ... The theoretical model states trade openness, exchange rate and financial development as determinants of FDI Fedderke and Romm (2006) investigated the growth impact and determinants of FDI in South Africa from 1956–2003. Positive technological spillovers from foreign to domestic capital were found with FDI in South Africa tending to be capital intensive, suggesting horizontal FDI. The trade openness of the economy also impacted strongly on FDI with increasing imports lowering FDI and increasing exports raising FDI.... [tags: Investment, Foreign direct investment]
838 words (2.4 pages)