international business

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First read my answer.Then read my colleagues answers and comment to each one thoughtful.Thank you.

My answer
Foreign Direct Investment (FDI) as defined by World Trade Organization (WTO) is the act
whereby investor from one, which is their motherland, acquires an asset from a foreign state with
the intention of managing the asset. FDI is very much significant in the developing nations like
those in Latin America, Asia, and Africa because it mainly boosts the economic growth of those
countries. Therefore, in 2008 Ireland had a high FDI than Japan because it is less developed
compared to Japan which is already an industrialized country. Japan, being an industrialized
state, do not require more industries like factories because if they are established more in the
state like in Ireland, it will be a surplus to the country hence resulting in wasting of resources.
Raw materials are another cause of the difference in FDI growth. A country like Ireland which is
less developed compared to Japan has a lot of raw materials which require being mined and
utilized to bring development to the country. Therefore, investors from the developed countries
see the opportunity of the raw materials hence start-up industries there to exploit the raw
materials and also through the process creating employment to the locals and economic growth at
large. Another cause of the difference in FDI between Ireland and Japan is opportunities for
income. Ireland being a developing nation has a lot of opportunities which have not yet been
utilized. Hence this is the reason why it had more industries established in2008 than Japan.
Some of the opportunities include manufacturing and processing industries which are less
compared to those in Japan, information, and communication technology (ICT) opportunity,
hospitality sector like hotels and catering, mining and processing opportunities among others.
Investors came to Ireland to exploit those opportunities so that they may increase their income.
Student 1 answer:
Although FDI has grown more rapidly than world trade and world output and is encouraged due
to the shift towards democratic political institutions and free market, differences in FDI inflows
still vary between countries throughout the world due to various factors.
One of the biggest factors is the political ideology of the country to the extent in which it
encourages or is hostile to FDI. This includes the regulations and policies countries have in
place already. Japan has been a country that historically favored domestic markets over global
markets and has implemented protectionist policies in fear of foreign competition. A regulation
as such would definitely discourage other countries from making foreign direct investments to
Japan. On the other hand, Ireland is one of the most globalized country in the western world and
has more FDI-friendly regulations than Japan. First, it has a strong and long standing trade link
with the UK and US. Second, it’s tax regime as well as holding company regime are very open
and transparent having one of the lowest corporate tax rates and generous exemptions. These
aspects of Ireland offer a better climate for FDI inflows than Japan.
Two other factors are labor force and stability. Comparing the two countries’ workforce, Ireland
has a skilled, multi-disciplined labor force that is relatively cheap whereas Japan’s workforce is
more expensive. In terms of stability, Ireland has a strong legal and regulatory framework that
supports business in which its legal concepts are recognized and understood by most foreign
investors.
Overall, taking into account the various factors, during the time period of 2008 Ireland was
considered a more attractive country to invest in factoring in all the challenges that would be
faced in Japan’s economy.
Student 2:
This can be for many reasons. For example, Ireland can be perceived as a better destination
for their investments against Japan. Ireland can also be easier to establish operations in
which is appealing to companies because it is less work and less regulations to take into
account. Japan has many regulations that companies have to take into account that may not
be worth doing when Ireland is more favorable and has way less regulations. It all depends
on whether which country has a more favorable growth prospect and in this case it is
Ireland. When is comes down to it the gross capital formation is the total amount of capital
invested in that particular country. So Ireland having a much higher gross fixed capital
formation is a great look to how successful a company would be because of all the
investment made in that place.
Student 3:
Foreign Direct Invest (FDI) inflows essentially stem from the attractiveness of the host country
and their respective policies towards FDI. In this situation, Ireland received more FDI than Japan
because to foreign countries, Ireland was the more attractive nation for their specific
investments. When deciding whether to invest in a host nation or not, the home country will look
at the relative openness of the economy as an indicator. Ireland is a developed nation that has
few barriers to trade which invites foreign firms to enter their economy. On the other hand, Japan
has historically been a nation that has implemented protectionist policies and regulations by
favoring domestic markets over trading on the global stage, in efforts to spur growth their
economy. They implemented non-tariff barriers to trade such as quotas, high standards, etc.
Moreover, these barriers made Japan less attractive for FDI because these policies and general
attitude are difficult to infiltrate and/or overcome. Additionally, Ireland is a country that, at the
time before the financial crisis, had a stable and strong economy and favorable political climate,
which made it a target for FDI. Overall, FDI only occurs if a home nation will experience greater
benefits than losses and in 2008, Ireland’s benefits were greater than their losses, compared to
Japan where costs were ultimately high and risky.
Student 4:
As the professor said gross capital formation summarizes the total amount of capital
invested in factories, stores, office buildings etc. If investment in capital is high, a country
has ideal growth prospects. This entire discussion boils down to one term FDI. FDI is
Foreign Direct Investment. Foreign Direct Investment is an investment made by a company
or individual in one country in business interests in another country, in the form of either
establishing business operations or acquiring business assets in another country, such as
ownership or controlling interest in a foreign country. When looking at Ireland vs Japan their
opinions on FDI is different. Ireland is FDI friendly where Japan discourages inward FDI.
One reason that Ireland could have better FDI is because of having a well-educated and
inexpensive workforce compared to Japan who is more expensive. It could also be seen to
be easier for companies to establish operations in Ireland compared to Japan. However,
Japan does send red flags to companies because of their regulations that cause stress to
companies. Ireland tends to be the country to go to because companies see it to be an
easier path and more successful for them long term, I think this explains the difference in
FDI inflows.
Student 5:
A large capital formation in a country means a favorable economic growth for the country.
Capital formation means investment in factories, retail stores etc. which most of the times a great
contribution of this investments come from Foreign Direct Investment (FDI). Foreign Direct
Investment is attractive to companies where the country’s regulations towards foreign investment
are more friendly. As a result, this causes companies to invest in different things or establish
operations in that country. In this case, Ireland was perceived by foreign companies as a better
place to invest because they are a well-developed country were not too many regulations are put
against foreign investment. On the other hand, Japan has implemented many regulations against
foreign investment that has created a barrier to foreign direct investment, causing companies to
be less attracted to investing in their country. Japan has created these regulations to protect their
domestic producers. As a result, Foreign Direct Investment occur the most in countries were
regulations towards foreign investment are favorable and easy to manage for foreign
companies. Just saying a personal taught about this chapter. For me, Foreign Direct Investment is
something that definitely helps the country’s economy. It does not only create more jobs and
opportunities for the country’s people, but it also creates competition. I have seen in my country
Panama, how FDI has helped our economy. From 2008 to the date foreign companies have
invested huge amounts of money in Panama. From international hotels to restaurants chains etc.,
all of these have created a huge amount of jobs and competition in Panama, that have boosted
enormously our economy. I can say I have seen both sides of Panama; Before 2008 and after
2008 Panama’s economic boom, and a great contribution of that was because of FDI.

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