StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...

FDI in the UAE - Term Paper Example

Cite this document
Summary
Running head: FDI in UAE  FDI in UAE  Insert Name Insert Insert 16 April 2010 Foreign Direct Investment in the United Arab Emirates Introduction Foreign Direct Investment is any type of investment that earns interest and operates in foreign economies other than the domestic economy…
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER99% of users find it useful
FDI in the UAE
Read Text Preview

Extract of sample "FDI in the UAE"

Download file to see previous pages

The government reviewed and strengthened the legal framework through the Ministry of the Economy to facilitate foreign direct investment in the economy. The government also signed free trade agreements with partners in the global economy in a move to make the economy more competitive in the global market place. Multinational companies’ preference to invest in the United Arab Emirates can be attributed to its position as a global trade hub, with outstanding performance compared to the rest of the world.

The economy is one of the world’s preferred re-export destinations because of its desirable characteristics in hiring foreign labour, timeliness of shipments in reaching destination, effective cost of imports and exports, quality of air transport, port, and road infrastructure. The government facilitates foreign direct investment due to the benefits linked to it. FDI is proved to stimulate and maintain economic growth, promote technology transfer and encourage more efficient management skills (Inter-American Development Bank, Organization for Economic Co-operation and Development, pg 12) The pie chart below shows that United Arab Emirates is the third largest foreign direct investment economy after the United Kingdom and the United States. Table 1.0 Source: Salman A.

and Hui Xiao Feng (http://download-reports.blogspot.com/2011/02/gdp-growth-with-economic-stability-fdi_02.html) Forms of Foreign Direct Investment in U.A.E Foreign direct investment can basically be classified into two forms, that is, Greenfield investments and mergers investment. Greenfield investment refers to a situation where a wholly new operation is introduced in a foreign country while mergers investment involves a case where an investment seeks to merge its operation with those of an already existing investment in the foreign country.

The mergers can be acquisitions, strategic alliances, or joint ventures. Foreign direct investment can further be classified into market-expansion investments and resource-seeking investments. In market-expansion investments, investment abroad is done in the in the same industry as the parent company, while in resource-seeking investment, investment abroad is done to search for large profitable markets and source inputs for a firm's domestic production process (Gregoriou & Renneboog, pg 31). Green field investment is a form of foreign direct investment where a parent business starts a new operation in a foreign country.

The parent companies undertake to construct new facilities and hire new permanent employees in a foreign country. Foreign countries often offer incentives such as tax-breaks and subsidies to encourage Greenfield investments that benefit the developing countries through creation of jobs and technological advancement countries. However, Greenfield investment has a major setback to host countries in that, profits from operation are not reinvested or put back into the domestic economy. The profits gained from operations of Greenfield investors are taken back to multinational's home economy unlike local companies whose profits are re-invested into the domestic economy.

Therefore, host countries do not benefit much economically but gain long term benefits from job creation, technology and managerial skills transfer (Aswathappa, pg 29). Creation of employment, technology, and managerial skills transfer is viewed to be of more advantageous to the country than loses in offering tax breaks and subsidi

...Download file to see next pages Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“FDI in the UAE Term Paper Example | Topics and Well Written Essays - 1250 words”, n.d.)
Retrieved from https://studentshare.org/environmental-studies/1412552-fdi-in-the-uae
(FDI in the UAE Term Paper Example | Topics and Well Written Essays - 1250 Words)
https://studentshare.org/environmental-studies/1412552-fdi-in-the-uae.
“FDI in the UAE Term Paper Example | Topics and Well Written Essays - 1250 Words”, n.d. https://studentshare.org/environmental-studies/1412552-fdi-in-the-uae.
  • Cited: 0 times

CHECK THESE SAMPLES OF FDI in the UAE

International Business

A Report on the Strategy Suitable for Reliance Retail to Enter the uae Retail Segment Summary This report is intended to analyse the strategy suitable for Reliance Retail to enter the uae retail segment.... hellip; The size and potentiality of the uae retail market is discussed in the report.... This report will make a detailed look into the market entry strategy suitable for Reliance Retail, one of the largest retail companies in India, to enter the uae retail segment....
9 Pages (2250 words) Essay

Macroeconomic Performance of the UAE

Macroeconomic Performance of the uae Table of Contents Table of Contents 2 Introduction 3 Macroeconomic Performance of the uae 4 GDP 4 Inflation Rate Fluctuations 6 Population Rate of UAE 7 Imports and Exports 9 Unemployment Rate 11 Balance of Payment 11 Recommendations 12 Conclusion 13 References 15 Introduction This paper has been focused on the economic conditions currently prevailing within United Arab Emirates (UAE), since the last ten years.... Macroeconomic Performance of the uae The macroeconomic performance of UAE can be assessed with reference to the major indicators including the GDP growth rate, inflation rate, population rate and its leading industrial components with due significance to the dimensions of oil reserves and oil exports....
9 Pages (2250 words) Essay

Economics and Tourism Industry in UAE

Tourism Industry in uae Introduction The tourism in uae and the whole Gulf area remains comparatively immature.... Structure of the industry The tourism industry in uae constitutes a very competitive market structure with very many airlines in the nation....
13 Pages (3250 words) Essay

The Rise in Importance of FDI for Multinational Enterprises

The analysis of the rising trend in the various regions of the world and the possible impact of fdi in the host and home economies has been made in this paper.... If one makes a comparison between export and FDI during the last twentieth century one can see that the exports grew much stronger than fdi in the pre 1980 period while the FDI sown an unprecedented rise after 1985.... The enterprises, which have dispersed their business processes across the globe through the channel of fdi, are termed as Multinational Enterprises (MNEs)....
8 Pages (2000 words) Essay

UAEs Government Structure, Internal Growth and the Opportunities of Import and Export

Then we'll also look at the government structure of the uae and how they encourage foreign policies.... We will also look at the imports and exports of the uae and discuss how they've been encouraging foreign direct investments.... The paper "UAEs Government Structure, Internal Growth and the Opportunities of Import and Export" states that currently, the projects under construction have a worth more than $350 Billion US Dollars, 80% of total imports of uae are of machinery and transportation equipment....
12 Pages (3000 words) Case Study

International Economic Environment of Business

Analyses of the recent trade and investment reforms in the country reveal that international businesspeople continue to flock into uae because of the prevailing comfortable business environment.... The country has adopted proactive measures to make sure that the activities of the foreign investors are not hindered by any internal economic hurdles that could destroy the plan of uae government to create an international business haven for businesspeople of different kind....
7 Pages (1750 words) Essay

The United Arab Emirates: Economic Profile

the uae presently has an approximate population of 5,314,317, a large increase from its population on 1968 of 180,000 (Elhiraika & Hamed 2-3).... the uae has a total land area of 83,600 square kilometers, with a coastline of 1,318 km and is bordered by Saudi Arabia on its west, Oman on its east, and the Persian Gulf to the North.... the uae economy has undergone a significant change from an impoverished region to one with a high degree of standard of living since the discovery of oil within its borders in the 1950s (CIA Para 1)....
17 Pages (4250 words) Research Paper

Foreign Direct Investment in the Middle East

This paper will study direct foreign investment in the uae and relating data to text evaluations.... The economy of the uae changed tremendously over the last few decades, particularly since the discovery of oil Abu Dhabi and to a lesser degree in Dubai.... Chart showing the growth of fdi in UAE between 2010 and 2013 in billions of dollars (Current Pries).... In particular, the PPP values should be employed to compare fdi in Saudi Arabia and the one in UAE....
2 Pages (500 words) Case Study
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Contact Us