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

Critical evalluation of the extent to which institutional factors influence inward and outward FDI - Essay Example

Comments (0) Cite this document
Summary
Part 1: The Essay Critically Evaluate the Extent to Which Institutional Factors Influence Inward and Outward FDI (Foreign Direct Management) Name: Instructor: Course: Date: Critically Evaluate the Extent to Which Institutional Factors Influence Inward and Outward FDI (Foreign Direct Management) The quality of institutions affects the inflow and outflow of foreign domestic investment, particularly for the developing countries…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER97.6% of users find it useful
Critical evalluation of the extent to which institutional factors influence inward and outward FDI
Read TextPreview

Extract of sample "Critical evalluation of the extent to which institutional factors influence inward and outward FDI"

Download file to see previous pages However, it is difficult to measure the various institutional factors and therefore the extent to which it influences inward and outward FDI is a subjective issue. The issue of “institutional distance” has been found to have an influence on both the inward and the outward FDI. Institutional distance is the difference in the quality of institutions between two or more countries. Quere et al. (2007) studied the determinants of FDI and concluded that “raising the quality of institutions and making them converge towards those of source countries may help developing countries to receive more FDI, hence help them to catch up, independently of the indirect impact of higher GDP per capita”. It is widely known that good quality institutions have a positive impact on the inflow and outflow of FDI. Some scholars suggest that institutional differences may be a source of comparative advantages, some sectors being more ‘institution-intensive’ than others, and that this could be a source of more trade flows. To the extent that trade and FDI are complements, this could raise FDI too. Good governance is one of the institutional qualities which are thought to positively affect the flow of FDI. Globerman and Shapiro (2002) studied the impact of the main components of the governance indicators on both inflows and outflows of a country’s FDI. They concluded that good governance encouraged both FDI inflows and outflows; although the impact of good governance on the outflow of FDI only applies to relatively large and developed countries. However, measuring governance is a subjective task which varies from one research to another. Some studies concentrates on one country yet trade flow involves at least two countries. Since FDI flows can move on either direction, governance of all the countries involved should be scrutinized in order to determine the actual impact of governance on both in-flows and out-flows of FDI. The tax system of a host country is another determinant of FDI. If a tax system of a country is set in a manner that the products and services of foreign firms are more taxed than those of the local firms, the inward flow of FDI is likely to be reduced. This is because the foreign firms would have a challenge in setting the prices of their goods and services; in order to make profits, they might be forced to set their prices above those of the local firms thus leading to lower than expected sales. On the other hand, imposing heavy taxes on the products and services of the local firms may hamper their growth. For this reason, the local firms may not grow to become MNEs and thus affecting the outward FDI. However, heavy taxes on the local firms may lead to investment in other countries where the tax rates of taxation is relatively lower. This will lead to increased out-flow of FDI. Corruption is also another institutional factor which is known to determine the flow of FDI. Many researchers have found that corruption increases the cost of investment and lead to reduced expected revenues. Taking corruption to mean “paying certain individuals in order to get an investment opportunity in the host country”, it would negatively affect the inward flow of FDI. In addition, the misuse of public funds and resources by ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Critical evalluation of the extent to which institutional factors Essay”, n.d.)
Critical evalluation of the extent to which institutional factors Essay. Retrieved from https://studentshare.org/macro-microeconomics/1402766-dynamics-of-multinational-companies
(Critical Evalluation of the Extent to Which Institutional Factors Essay)
Critical Evalluation of the Extent to Which Institutional Factors Essay. https://studentshare.org/macro-microeconomics/1402766-dynamics-of-multinational-companies.
“Critical Evalluation of the Extent to Which Institutional Factors Essay”, n.d. https://studentshare.org/macro-microeconomics/1402766-dynamics-of-multinational-companies.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF Critical evalluation of the extent to which institutional factors influence inward and outward FDI

S&T Debt Factors

The agreement contains a credit default contracts that include credit default swaps, default index contracts, credit default options, and credit default basket options. One can use these as part of the mechanism that is collateralized by debt obligations. The goal should be to establish a price for a given risk and controlling credit based on risk. The credit can be allowed by minimization of risk. Credit controllers should develop versatile tools that transfer risk away from a lender’s balance sheet.
d) With reference to the proposed debt counseling business, illustrate and explain exactly how you would organize the debt counseling operation, taking particular care to explain how and when you would receive payment for...
6 Pages(1500 words)Case Study

Virulence Factors of Candida Albicans

 The virulence factors are all the factors that are related in the process of morphogenesis, adhesion, penetration, and colonization of Candida in tissues and blood vessels. Since the hyphal form is often associated with infection, the understanding of hypha-specific cell surface components may help in the identification of the proteins responsible for morphogenesis and virulence. Fungal infection can be treated by the prevention of hyphal development in C. Albicans by antifungal drugs. Understanding Candida biology, genetics, and molecular mechanisms may lead to novel effective antifungal therapy for drug-resistant organisms.

With the help of this strategy, it can survive and grow on the skin, mucosal surfaces and...
10 Pages(2500 words)Case Study

Critical Care Nursing

Respiration occurs at the alveolar-capillary units of the lungs where oxygen (O2) and Carbon dioxide (CO2) are exchanged through inhalation and exhalation bypassing the gas between the alveolar and the blood. In an ideal gas exchange, blood flow and ventilation must perfectly match each other. But even in a normal pair of the lung, some alveoli are under-ventilated and adequately perfused while others are over ventilated but inadequately perfused. Technically speaking, the optimally ventilated alveoli that are not perfused are termed high V/Q units (acting like dead space), and alveoli that are optimally perfused but not adequately ventilated are called low V/Q units (acting as a shunt) (Sat Sharma MD 2006).

The major f...
13 Pages(3250 words)Case Study

Physiological Factors While Dealing With Health Issues

The body’s metabolism includes all the physiological processes in the body. Enzymes serve as catalysts to biochemical reactions that form a part of metabolism. The two distinct chemical phases of metabolism are anabolism and catabolism. Anabolism consists of building up carbohydrates, proteins, fats and nucleic acids from simple molecules, through the use of energy. Anabolism is responsible for processes such as growth, repair, and reproduction. On the other hand, catabolism is the process by which large complex molecules are broken down into smaller, simple molecules, with the release of energy. Metabolic processes are carried out by the cell organelles, each organelle has a distinct and crucial function. Every animal cell...
12 Pages(3000 words)Report

Leadership: a Critical Construction

I experienced all the theories by different writers by working on them practically. While working in a group, I found out communication plays a very important role in group performance. Team working, communication and leadership, all are very important in group working and a group cannot work and perform successfully in the absence of these skills and because of these skills being poor. During my work, I found out communication, whether it is written communication, verbal communication or face-to-face communication, is very important in all its forms because it is only because of communication that we are able to deliver our messages and ideas to each other.
Leadership also plays an important role because a leader is required...
11 Pages(2750 words)Personal Statement

Factors Determining Voting Patterns in Youth Vote

It is estimated that 3.4 million more young people cast their ballots in this election than in the election of 2004, and the surge in youth turnout accounts for at least 60 percent of the total increase in voter participation in 2008. Voters under the age of 30 increased their share of the overall electorate to 18 percent, up to one percentage point from the previous 1996 to 2004 elections, according to the National Exit Polls (NEP) conducted by Edison and Mitofsky. (Pawlenty, 2008, p. 2) The impact of the youth vote proved crucial in claiming the battleground states of Florida, Ohio, and Virginia. Thanks to the youth vote, these electoral college vote-rich states were successfully converted to blue (Democratic) states (Bell, 2008...
11 Pages(2750 words)Assignment

Suicidal Behaviour: Nature, Nurture and Genetic Factors

Various studies have demonstrated the effect of perinatal and early childhood factors on mental health including suicidal behavior. Glover & OConnor (2002) demonstrated the adverse effects of antenatal maternal stress on the psychological development of the offspring. Brown et al (2000) reported that maternal malnutrition during pregnancy results in a higher incidence of affective disorders in adulthood. Thompson et al (2001) demonstrated similar results with low birth weight. In 2004, Mittendorfer- Rutz et al reported that low birth weight and younger maternal age was associated with suicide in the offsprings when they became young adults. In 2006, Riordian et al studied the relationship between perinatal circumstances and su...
8 Pages(2000 words)Term Paper

What Are the Most Important Factors in Explaining the Rise of the Modern State

Though the existence of the state can be felt in different walks of everyday life, yet it is an intangible whose nature is impossible to grasp. As a political institution, state embodies the concept of sovereignty. Devetak (2007) describes it as a political unit or a country that possesses sovereignty. State can thus be described as a single, unified whole confined within territorial borders. The state is built in a core geographical area with allowances to a certain extent on the boundaries. According to Strayer (1970), a state exists in the hearts and minds of the people. The collective personality of the state renders it immortal. The state is a multi-faced concept that is fuzzy around its edges. Consequently, we cannot develop...
6 Pages(1500 words)Essay

Impact of Motivational Factors upon Employees at Bank AlFalah and Standard Chartered Pakistan

The impacts of these policies upon the employees of the banks will be studied with the help of the responses of the employees of both of the banks. The proposed research study will present the case studies of these two banks by employing a qualitative research approach. The data and information for the study will be collected through secondary and primary resources i.e. through literature review and in-depth interviews of the employees of both the banks. The study will help in the identification of the major strengths and weaknesses present in the motivational policies of these banks and will allow proposing the formulation of improved policies.

Motivation basically refers to satisfying one’s needs through differe...
14 Pages(3500 words)Research Proposal

Critical Review of Goth: Identity, Style and Subculture by Paul Hodkinson

The allure from this standpoint is seen by the author. This report measures mainly the methodology that Hodkinson uses, which is grounded theory research, and the report also examines questions of fixed vs. flexible research. The findings of the research are briefly presented before the current research investigation concludes.

The Goth subculture is founded on principles of viewing some of what society outside this subculture, or mainstream culture, views as abhorrent or negative. There is some fetish tendency in this subculture towards the macabre and death, with face-paint style makeup and mourning clothing being prominent features of belongingness, which are certainly not reflective of mainstream fashion and makeup....
6 Pages(1500 words)Book Report/Review
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.

Let us find you another Essay on topic Critical evalluation of the extent to which institutional factors influence inward and outward FDI for FREE!

Contact Us