EBK PEARSON ETEXT INTERNATIONAL BUSINES
EBK PEARSON ETEXT INTERNATIONAL BUSINES
9th Edition
ISBN: 9780136846871
Author: Wild
Publisher: VST
Question
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Chapter 7, Problem 2TAI1
Summary Introduction

To Determine:

Which theory of FDI will either of the manager support needs to be analyzed.

Introduction:

You overhear the talk between your supervisor and the manager of another company. Your supervisor tells that he is fed up with companies outsourcing jobs to lower-wage nations. The other manager responds that if that decreases the company’s cost then it is good and fair since all the companies aim at making profits.

Suggestion:

Hence the manager opposing outsource will point out the following:

Ownership regulations imposed by host country

Higher taxes imposed on returns

The other manager favoring outsourcing will point out the following:

Favorable FDI policies formulated by the host country

Tax subsidies

Given information:

As per the data given the case is regarding outsourcing some of the jobs to low wage countries abroad.

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