Running head: DIRCET FOREIGN INVESTMENT1Direct Foreign InvestmentThe name of the studentThe name of the Institution
DIRCET FOREIGN INVESTMENT2Executive summaryThe Direct Foreign Investment (DFI) is driven by a number of factors such as the economic, political, and the legal systems that are set up in a country. The category of the country as underdeveloped, developing, or developed too determines the attractive level at whichthe country will be at as compared to others. If a country is underdeveloped, its DFI levels reduce as it will be difficult for the host country to start business in a jurisdiction that has got lower levels of law enforcement, has no developed infrastructure, and/or has high chances of crimes and corruption too. In this report, I have focused on the key explanation of these terms and decided to work with New Zealand as a country that any foreign host would wish to set up a business in.
DIRCET FOREIGN INVESTMENT3ContentsExecutive summary.........................................................................................................................2Introduction......................................................................................................................................4Analysis of New Zealand.................................................................................................................4Political economy analysis..............................................................................................................5Comparison of the political, economic, and legal systems and their benefits, risks, and costs.......6The political system.....................................................................................................................6The economic system...................................................................................................................6The legal system...........................................................................................................................6Recommendation.............................................................................................................................7Conclusion.......................................................................................................................................7References........................................................................................................................................8
DIRCET FOREIGN INVESTMENT4Introduction Investing in another country by a host country is greatly determined by the country’s political, economic, and social factors that drive the said country. Investing in the lowest income country or even underdeveloped country can lead to huge political payoff by the host country in the country in order to be allowed to invest in it. They do have sufficient laws that protect the intellectual property owned by the foreign investors resulting in the loss of the intellectual property and profits in the host’s DFI financial reports. The purpose for choosing New Zealand isbecause it has an open and attractive attitude towards the foreign investment (Hill, 2015). Analysis of New ZealandDirect Foreign Investment must be done effectively in order to determine the best business that a host country can do in the country. It is an open country to any new investor as they are treated similarly to the local investors (Kelsey, 2015). In order for the oversea investor to be allowed to invest in the industry, he or she must pass the test as it is a basic requirement of them (Parkyn & Vehbi, 2014). The host investor must make an application if he or she wants to acquire 25% of the total share of a company in the economy that has more that NZ $50 million (James, 2015). Political economy analysisThe political economy term is used to refer to the interactions of the politics and the economy of a certain country as they are the key drivers of that economy. It involves the analysis
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