International Business: Competing in the Global Marketplace
12th Edition
ISBN: 9781259929441
Author: Charles W. L. Hill Dr, G. Tomas M. Hult
Publisher: McGraw-Hill Education
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Question
Chapter 8, Problem 1CTD
Summary Introduction
To discuss: The difference in the percentage in foreign direct investment (FDI) inflows in Country I and Country J.
Introduction:
Gross fixed capital formation is the investment in the fixed assets like warehouses, retail stores, and factories.
Expert Solution & Answer
Explanation of Solution
The difference in the percentage in foreign direct investment (FDI) inflows in Country I and Country J are as follows:
The difference in the percentage in foreign direct investment (FDI) inflows in Country I and Country J mainly because of the government policies
Country I is basically a friendly FDI whereas Country J is not as such kind. Country J does not encourage inward FDI. Though these two countries are trade dependent economies with limited available resources Country I is comparable less mercantile in attitude with that of Country J. Country I has relatively low cost workforce, ample supply of labor and well educated.
Whereas work force of Country J is well educated is more expensive than the Country I.
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