Chapter 2: World investment prospects
Aims of the exercise
- To use UN web resources on international business
- To gain up-to-date understanding of world investment trends based on UN research
- To identify the factors affecting investment decisions in different regions
Getting started
Go to the home page of UNCTAD (the UN Conference on Trade and Development) at
www.unctad.org. In addition to the topics covered by the site, you will find a list of available documents for public access. Click on ‘
World Investment Prospects Survey 2008-10’, which will open a pdf file. This survey presents findings of UNCTAD’s panel of experts based on responses of organizations to questionnaires in every region. There is an executive summary at the beginning listing the main findings. These are discussed more fully in the chapters that follow. Read Chapters 1 and 2.
Note that the UN uses the term ‘TNC’ (transnational corporation), which is approximately equivalent to the term ‘MNE’.
Tasks
Answer the following questions about the
World Investment Prospects Survey 2008–10.
A. In relation to Chapter 1 of the Survey
- Financial crisis is highlighted as a negative factor in companies’ plans for international investment. However, the survey found that the trend towards internationalization is continuing. Why?
- What are the main risk factors in FDI decisions at present?
B. In relation to Chapter 2 of the Survey
- What are the main factors which influence TNCs in making investment decisions in particular regions?
- Compare the EU 15 (and other European countries) with the new EU 12 in terms of attraction to investors.
- What are the main factors which attract investors to developing countries? Compare the attractions of South, East and South-East Asia to Sub-Saharan Africa.
- Look at Box 4, p. 25, on specific modes of entry by host region. What are its main conclusions?
C. Reflection
- To what extent does some optimism emerge from this survey, despite the negative effects of financial crisis and uncertainty? In your view, which regions will have the greater cause to feel optimistic over FDI prospects over the period?
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