More Related Content Similar to Benefits and Costs of FDI for Host and Home Countries Similar to Benefits and Costs of FDI for Host and Home Countries (20) More from Gale Pooley (20) Benefits and Costs of FDI for Host and Home Countries5. Host Country
Benefits
Resource-Transfer Effects
Employment Effects
Balance-of-Payment Effects
Competition and Growth
11. Balance-of-Payment
Effects
Current account
Net of payments and receipts
FDI substitutes imports
China cell phones
13. Competition and
Growth Effects
More choices
Higher quality & lower costs
Cell phones
15. Host Country
Costs
Competition & Monopoly
Balance-of-Payments
Independence
19. Balance-of-Payment
Effects
Invest in then take profits out
Import parts to assemble
Local content requirements
23. Home Country
Benefits
Inflow of foreign earnings
Demand for exports
Intermediate and compliments
Learn new skills
25. Home Country
Costs
Balance-of-Payments
Capital Out
Low cost production
No longer an export
Employment
27. Government Policy
Instruments
Home Country
Encourage
Insurance, loans, tax credits
Political pressure
Restrictions
29. Government Policy
Instruments
Host Country
Encourage
Insurance, loans, tax credits
Restrictions
Ownership and Performance
31. WTO
1995
Services
Telecommunications
Finance
32. Transportation Low
Export
Costs and Tariffs?
High
Knowledge amenable No
FDI
to licensing
Yes
Tight control over Yes
FDI
operation
No
Protected knowledge No
FDI
with contract
Yes
License
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