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Assignment on International Business and FDI

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Added on  2020-04-21

Assignment on International Business and FDI

   Added on 2020-04-21

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Running Head: INTERNATIONAL BUSINESS International BusinessStudent Name Course Code
Assignment on International Business and FDI_1
1INTERNATIONAL BUSINESSWhat are the benefits to the Russian government from foreign direct investment in generaland in the oil industry in particular?FDI holds an important place in the macro as well as micro economy of Russia. It has ledto important economic development as it has provided proper allocation of funds to the statebudget where the distribution of funds were inadequate. FDI has helped in enhancing thescientific and technical potential of Russia (Berdysheva & Romanova, 2017). It has alsoprovided access to the Russian products in international market. Due to an opening ininternational market FDI has improved the production of various industries in Russia. MoreoverFDI has helped in starting up new business ventures based on production in the country. Themost important contribution of FDI to Russian economy is the development of their abundantnatural resources especially in the field of oil. Russia has been largest oil exporter in the worldand it maintained its status quo for a long time which has made it the global superpower for abetter part of the century (Kapusuzoglu & Ceylan, 2017). But after dissolution of the SovietUnion, Russian oil companies started to fade due to lackluster condition and improperavailability of funds. FDI has helped those oil companies to re-establish themselves by providingthem with proper funds to enhance their technology and upgrade their infrastructure to competein the international market. What are the risks that foreign companies must bear when making investment in Russia?What are the sources of this risk? How substantial are they?After the dissolution of Soviet Union, Russia has suffered from economic breakdown asits government machinery has lacked the means and resources to uplift itseconomy(Berdysheva& Romanova, 2017). In recent days Russian currency has taken a dip in theinternational market and has become one of the weakest currencies. Due to this reason Global
Assignment on International Business and FDI_2

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