International Banking and Finance Report: Chile FDI Performance

This report analyzes Foreign Direct Investment (FDI) in Chile, focusing on its impact on the country's economy. It explores the definition of FDI and distinguishes it from foreign portfolio investment, highlighting Chile's success in attracting FDI. The report examines the benefits of FDI, such as increased labor productivity and market competition, and discusses the government's initiatives, including the national program for rural electrification. The report references key studies and provides insights into Chile's approach to attracting and managing FDI, including a focus on renewable energy sources for rural electrification. The analysis provides a comprehensive overview of FDI's role in Chile's economic development.

Running head: INTERNATIONAL BANKING AND FINANCE
International banking and finance
Name of the student
Name of the university
Authors note

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Table of Contents
Answer to question 1.......................................................................................................................2
References........................................................................................................................................4

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Answer to question 1
A foreign direct investment is an investment in the form of a controlling ownership in a
business in any country by an entity based in any other country. Hence the foreign investment
and the foreign direct investment is very much distinguishable from the foreign portfolio
investment by the notion of a credit control. Hence the country like Chile has been very much
successful as far as the foreign direct investment is concerned. Hence the best uses of the foreign
direct investment over the years have made the country successful and had also uplifted the
economy as a whole. Hence the best practises of the foreign direct investment for Chile is as
follows-
 The performance measurement records for the success of foreign direct investment for
chile have been doing good over the years. It focused on pioneering the engineering and
infrastructure reforms and even there had been more lessons incorporated out of the
practise. There are several indicators to this process which suggests that the overall
impact or the benefits of the foreign direct investment. Hence it had increased labour
productivity rate, dropped the total employment ibn electricity sectors to 5706, and
increased competition in the market in real terms (Guimón et al., 2018).
 However in the key policy element the government’s new programme called as the
national programme for the rural electrification. Under this programme the capital costs
of extending necessary electricity infrastructure have been tripled to almost 70 percent in
the financial year. Hence the users paid the operational costs once the infrastructure has
been developed. The global entity constantly contemplates chillies continuing rural
electrification objective to the renewable source of energy like the wind, biomass,

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geothermal and the solar projects to reach several isolated areas (Gorodnichenko et
al.,2014.)
.

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References
Gorodnichenko, Y., Svejnar, J. and Terrell, K., 2014. When does FDI have positive spillovers?
Evidence from 17 transition market economies. Journal of Comparative
Economics, 42(4), pp.954-969.
Guimón, J., Chaminade, C., Maggi, C., & Salazar-Elena, J. C. (2018). Policies to attract R&D-
related FDI in small emerging countries: Aligning incentives with local linkages and
absorptive capacities in Chile. Journal of International Management, 24(2), 165-178.