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Fdi 12.05.12
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Transcript of Fdi 12.05.12
OTHER FOREIGN DIRECT INVESTMENT PROCESS
By : Neil P. Dueñas
FOREIGN DIRECT INVESTMENT
DUNNING ECLECTIC’S VIEWJOHN DUNNING (1977)
-He pionerred the research to find a comprehensive framework for explaining F.D.I and known as the O.L.I paradigm or O.L.I. framework
O.L.I Framework :O – (Ownership Specific Advantages)
-refers to the competitive advantages of the enterprise seeking to engage in FDI-the greater the competitive advantages of the investing firm, the more they are likely in foreign production-trademark, production technique, entrepreneurial skills, returns to scale are characteristics of ownership advantages
RolleyGolf Trolley
Ownership Advantage
SAAB’S Car
FOREIGN DIRECT INVESTMENT
L – (Location Specific Advantages) -locational attractions refer to the alternative countries or regions , for undertaking the value adding activities of MNE (multi-national enterprise)
-are linked to specific factors of a foreign country that could include cheap labor, superior production processes, local image, governmental trade barriers or others, which justify to undertake production in that country in order to obtain new competitive advantages, - it can internally exploited, through complementary resources of the firm like an international distribution network, or finance capability.
Location Advantage
IKEA AND WALMART SHOP IN INDIA
FOREIGN DIRECT INVESTMENT
I – (Internalisation Advantages) - advantages by own production rather than producing partnership arrangement- benefits of retaining assets and skills in the firm, market controls among others
Internalisation - a transaction conducted within the confines of a corporation rather than in the open market
INTERNALISATION ADVANTAGE
FOREIGN DIRECT INVESTMENT
DISINVESTMENT- It is the action of an organization or
government selling or liquidating an asset or subsidiary
- a company or government organisation will divest an asset or subsidiary as a strategic move for the company , planning to put the proceeds from the divestiture to better use that garners a higher return on investment
DISINVESTMENT
DISINVESTMENT HAPPENED IN MONSANTO CORPORATION
---THANK YOU----