You are the CEO of a company that has to choose between making a $100 million investment in Russia or Poland. Both investments promise the same long-run return, so your choice is driven by risk considerations. Assess the various risks of doing business in each of these nations. Which investment would you favor and why?
You are the CEO of a company that has to choose between making a $100 million investment in Russia or Poland. Both investments promise the same long-run return, so your choice is driven by risk considerations. Assess the various risks of doing business in each of these nations. Which investment would you favor and why?
Foreign investment entails the transfer of funds from one country to another, with foreign investors gaining significant ownership holdings in indigenous businesses and assets. Foreign investment means that foreigners have an active involvement in management as a result of their investment or a substantial enough equity position in the company to affect business strategy. Globalization is a current trend, with international corporations investing in a range of countries.
Foreign investments are divided into two categories: Direct and Indirect.
- Foreign direct investments (FDIs) are physical investments and purchases made by a corporation in a foreign country, generally through the establishment of facilities and the purchase of buildings, machines, factories, and other equipment. These investments are significantly more popular, as they are often regarded long-term investments that assist boost the economy of a foreign country.
- Corporations, financial institutions, and private investors obtain interests or positions in foreign enterprises that trade on a foreign stock exchange through indirect overseas investments. In general, this type of foreign investment is less advantageous because the domestic business can swiftly sell off its investment, often within days of purchase.
Trending now
This is a popular solution!
Step by step
Solved in 4 steps
