Foreign Direct Investment - Why governments intervene in FDI - Reasons for intervention by the home country
3 important questions on Foreign Direct Investment - Why governments intervene in FDI - Reasons for intervention by the home country
What are reasons countries discourage outward FDI:
- Investing in other nations sends resources out of the home country
- Outgoing FDI may damage a nation's BoP by taking the place of its exports
- Jobs resulting from outgoing investments may replace jobs at home
- Outgoing FDI may damage a nation's BoP by taking the place of its exports
- Jobs resulting from outgoing investments may replace jobs at home
What are reasons countries promote outward FDI:
- Outward FDI can increase long-term competitiveness
- Nations may encourage FDI in industries identified as 'sunset' industries
- Nations may encourage FDI in industries identified as 'sunset' industries
Industries that use outdated technologies or those that employ low-wage workers with few skills are called:
Sunset industries
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