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To understand the concept of Foreign Direct Investment

   

Added on  2020-10-22

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Research Project

Table of ContentsTitle: To understand the concept of Foreign Direct Investment......................................................1CHAPTER 1: INTRODUCTION....................................................................................................11.1 Research Proposal......................................................................................................................1(i) Research project description..................................................................................................1(ii) Research aim and objectives.................................................................................................1(iii) Rationale behind research....................................................................................................1(iv) Activities and Timescale......................................................................................................2.........................................................................................................................................................4CHAPTER 2: LITERATURE REVIEW.........................................................................................52.1 To understand the concept of Foreign Direct Investment.....................................................52.2 To analyse reasons of expansion in Foreign Direct Investment of society...........................62.3 To identify impact of Foreign Direct Investment of Mercedes Benz on economic growthof society.....................................................................................................................................72.4 To determine inter relationship between Foreign Direct Investment and economic growthof society.....................................................................................................................................7CHAPTER 3: RESEARCH METHODOLOGY.............................................................................93.1 Introduction...........................................................................................................................93.2 Research philosophy.............................................................................................................93.3 Research approach................................................................................................................93.4 Data collection......................................................................................................................93.5 Research Strategy................................................................................................................10CHAPTER 4: DATA ANALYSIS AND INTERPRETATION....................................................124.1 Data analysis.......................................................................................................................124.2 Data interpretation...............................................................................................................13CHAPTER 5: RESEARCH OUTCOMES....................................................................................215.1 Concept of Foreign Direct Investment................................................................................21CHAPTER 6: REFLECTION, RECOMMENDATION AND ALTERNATIVE SOURCE FORRESEARCH METHODIES...........................................................................................................226.1 Reflection............................................................................................................................22

6.2 Recommendation.................................................................................................................226.3 Alternative Source for research methodology.....................................................................23CHAPTER 7: CONCLUSION......................................................................................................247.1 Conclusion...........................................................................................................................24.......................................................................................................................................................24REFERENCES..............................................................................................................................25APPENDIX....................................................................................................................................27

Title: To understand the concept of Foreign Direct InvestmentCHAPTER 1: INTRODUCTION1.1 Research Proposal(i) Research project descriptionDue to increase in globalisation, the concept of Foreign Direct Investment is widelyspread among countries. Hereby, a company of one country make investment in organisations ofanother country, in order to earn high return on investment. For this purpose, a firm can eitherexpand its business in foreign nation or reinvestment profits to overseas subsidiaries fromforeign operations (Blonigen and Piger, 2014) . This would provide opportunity to earn highprofitability and run business more smoothly. There are multiple methods a company can use forFDI such as Merger and Acquisitions, Joint Ventures with overseas corporations, acquire votingstock in foreign companies etc. To get more information and understand the concept of FDI, thisreport is going to conduct a research, by taking various scholarly articles and books. For thispurpose, a case of Mercedes-Benz is taken, which is a German automobile company. It is mainlyknown for its luxury vehicles, coaches, buses and trucks. This firm is headquartered in Stuggart,Germany but has expanded its business in all over the world and serve products worldwide. (ii) Research aim and objectivesResearch aim: “To identify the reasons of expansion of Foreign Direct Investment.” A caseon Mercedes Benz. Research objectivesTo understand the concept of Foreign Direct Investment.To analyse reasons of expansion in Foreign Direct Investment of society.To identify impact of Foreign Direct Investment of Mercedes Benz on economic growthof society.To determine inter relationship between Foreign Direct Investment and economic growthof society. (iii) Rationale behind researchThe main reason behind chosen this topic is to analyse why globalisation is taking placewith rapid speed in organisation and how it impacts on economic growth of country. For this1

purpose, concept about difference in economic terms like FDI, tax rates, GDP, etc. are evaluatedin this research (Buchanan, Le and Rishi, 2012). With the help of this knowledge, it becomeseasy for researchers to understand role of globalisation in business expansion. Researchers alsohave personal interest to conduct study on globalisation and its impact business activities,especially in auto mobile sector, that helps in completing personal motto of them as well. Thisresearch also enables researchers to explore economic terms of country in which they have coreinterest. (iv) Activities and TimescaleResearch is considered as a process of collecting information from various internal andexternal sources for the purpose of in-depth analysis. For this purpose, researchers performdifferent activities in a proper time-frame while conducting research in order to address mainissue of study (Chandran and Tang, 2013). In this regard, the main activities carry out byresearchers to understand concept of Foreign Direct Investment are – Introduction –This is the first step which has to be considered for conducting businessoperations. It provides entire knowledge related to importance of research, background of topic,chosen company, rationale behind selection of topic and more (Harding and Javorcik, 2012). Forthis purpose, researchers will take near about 12 days to introduce the main part of research inshort and specific way. Aims and objectives –After introduction, next step carry out by researchers is to set appropriateaims and objectives which covers entire portion of main study. This is the base for wholeresearch which helps to provide direction to conduct research and way to carry out investigationspecifically. In this regard, they will take near about 15 days for setting aims and objectives. Literature review – Itis collection of information by using secondary research techniques thatprovides highly authentic source for gathering the required data. In order to address the mainobjectives of research, near about 18 days are required. Research methodology – It refers to a systematic discussion about techniques which arerequired to conduct information in effective and significant manner (Jadhav, 2012). For thispurpose, both primary and secondary research techniques are used to describe how researchersare going to make an investigation report and which methods they are used for the same. Withthis assistance, approximate 20 days are required for making a discussion about which tools aremore effective to gather information about FDI and globalisation. 2

Collection of data – It refers to collecting views of respondents on specific research topic. Thisis the method to collect authentic views on research topic by using primary and secondaryresearch techniques. Here, research team will take 25 days to collect authenticate and reliableinformation for making study on present topic. Analysis of data – It refers to interpreting information which is collected from respondents. Thisprovides information about change in trends. For this assistance, more than 16 days are requiredto arrange analyse and interpret the data in appropriate way. Conclusion and recommendations-Conclusion is mainly provided on the basis of informationcollected by using various primary and secondary techniques as well as how the same is analysed(Lau, Choong and Eng, 2014). In this regard, three days are enough to make conclusion onresults obtained by analysis of data and further, make recommendation accordingly to thecompany on which entire research is done. For framing the given activities of research into fixed duration of time, Gantt Charttechnique is used, that helps to analyse required time to collect information about time requiredto complete specific information. This helps to divide whole research in different activities wittheir allotted time. 3

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CHAPTER 2: LITERATURE REVIEWIt refers to systematic, reproducible and explicit method for determining, analysing andsynthesizing existing body of the recorded and completed work that produced through scholars,investigator sand practitioners (Lee, 2013). It is comprehensive study as well as interpretation ofliterature that help in address particular topic. It is an in-depth and necessary evaluation ofprevious investigation. It is based on secondary investigation and the different sources tocollecting information are books, articles, internet sources etc. 2.1 To understand the concept of Foreign Direct InvestmentOn the basis of opinion of JAMES CHEN (2019) it has been stated that it is aninvestment in form of controlling ownership in business in one country through an entity basedin other. It is distinguish from foreign portfolio investment through notion of the direct control. Ittaken place when investors develop business operations at foreign or acquire the foreign businessassets consisting controlling interest in foreign firm (Mathur and Singh, 2013). Foreign DirectInvestment is different from portfolio investment under which an investor but equities of theforeign based organisations. It is commonly made in an open economies that provide skillslabour and growth prospects for investors. In addition to this, FDI can be made in many differentways consisting opening of subsidiary in foreign country, acquiring controlling interest inexisting foreign firm or by means of joint venture or merger. Investment in to foreign company is regarded as Foreign Direct Investment if it establishlasting interest. In context to this, lasting interest is developed when an investor obtain at least10% of voting power in company (Moran, 2012). It is when a person or business owns at 10% ormore of foreign country. On the other hand, key to the Foreign Direct Investment is componentof control. It represents intent to the manage as well as influence the operations of foreigncompany. FDI also provides the some benefits for the foreign countries. For new start ups,Foreign Direct Investment provides source of the external capital and enhanced revenue(Morrissey and Udomkerdmongkol, 2012). It can be a tremendous source of the external capitalfor developing country which can be lead to the economic development. It is critical for theemerging as well as developing market countries. Firms require expertise and funding ofmultinational in order to expand its international sales.5

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