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ECS 4580 Foreign Direct Investment Assignment

15 Pages3853 Words244 Views
   

Middlesex University London

   

Foreign Direct Investment Assignment (ECS 4580)

   

Added on  2020-05-28

ECS 4580 Foreign Direct Investment Assignment

   

Middlesex University London

   

Foreign Direct Investment Assignment (ECS 4580)

   Added on 2020-05-28

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Running head: FOREIGN DIRECT INVESTMENTANALYSIS OF MOTIVES AND PROSPECTS WITHIN THE OLI FRAMEWORKName of the Student:Name of the University:Authors Note:
ECS 4580 Foreign Direct Investment Assignment_1
1FOREIGN DIRECT INVESTMENTAbstract:This study throws light on the analyzing the German FDI in business market of China throughthe OLI framework, a comprehensive approach to analyze FDI. The various theories that help toexplain the prospects and motives of German FDI in Chinese market are the theory of productcycle and internalization theory. This study is generally qualitative in nature and secondary datais used from the current literature. It is further revealed that foreign direct investment ofGermany is managed through internalization and location specific advantages in the businessmarket of China.
ECS 4580 Foreign Direct Investment Assignment_2
2FOREIGN DIRECT INVESTMENTTable of Contents1.Introduction:.............................................................................................................................31.1Objectives of the Research................................................................................................42. Literature Review:.......................................................................................................................42.1 Methodology and Data Used.................................................................................................52.2 Literature Review on the Motives and Prospects of German FDI in China..........................63.Analysis and Discussion:..............................................................................................................83.1 Analysis of German FDI in China Applying the OLI Framework........................................84. Conclusion:................................................................................................................................105. Bibliography:.............................................................................................................................12
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3FOREIGN DIRECT INVESTMENT1.Introduction:The OLI framework was created by Dunning for the study of Foreign Direct Investment(FDI) in China. This study emphasizes on the scrutiny of the objects as well purpose in the OLIframework. The given study deals with the German FDI in China. Foreign Direct Investment(FDI) plays a crucial role in the globalization of the economy as per Agarwal and Wu (2015). Itis quite different from the portfolio investments as it is carried by the MNEs and involvespackage of assets and intermediate products. From the European countries Germany is the mostvital trade partners of China and is further ranked at sixth position. In the year 2003, China wasproved to be the third largest beneficiary of FDI after gaining maximum inflows of investments(Chen and Chen 2016). In the same year, German corporations were ranked among the largestinvestors and known as the leading European investors in China. Few of the emerging organizations of Germany in Chinese market are Volkswagen,Siemens and Bayers. This companies are trading in the Chinese market over more than hundredyears. Germany invested in a huge amount in the China market and further enhanced its outflowof investment from $800 to $7.9 million. The trade flow and the communication between Chinaand Germany have been rapidly increasing. Currently there are 1500 companies in Chinarepresenting the German investments (Mathews and Tan 2014). In the year 2002, $ 52.7 billionof FDI were attracted by China and it rose to $ 53 billion in 2003 and further it rose to $ 61billion in 2004. During 2005, China topped the FDI Confidence Index for consecutive four years.China’s FDI amounted to $73 billion until May 2007 (Buckley et al. 2017). The issues that are besetting Germany’s foreign direct investment in China involve the sustainedlegal uncertainties existing within the country due to absence of intellectual property rights
ECS 4580 Foreign Direct Investment Assignment_4

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