Answer to Question 1
R&D costs are important production costs for companies considering FDI, and they have increased in recent years. As technology becomes an increasingly powerful competitive factor, the soaring cost of developing subsequent stages of technology has led multinationals to engage in cross-border alliances and acquisitions. For instance, huge multinational pharmaceutical companies are intensely interested in the pioneering biotechnology work done by smaller, entrepreneurial startups.
One indicator of technology's significance in foreign direct investment is the amount of R&D conducted by companies' affiliates in other countries. The globalization of innovation and the phenomenon of foreign direct investment in R&D are not necessarily motivated by demand factors such as the size of local markets. They instead appear to be encouraged by supply factors, including gaining access to high-quality scientific and technical human capital.
Even given its costs, FDI can benefit a host country by providing new technology and labor skills to its citizens. Investment in technology, whether in products or processes, tends to increase the productivity and the competitiveness of a nation. That is why host nations have a strong incentive to encourage the importation of technology. For years, developing countries in Asia were introduced to expertise in industrial processes as multinationals set up factories within their borders.
Many formerly communist nations suffer from a lack of management skills needed to succeed in the global economy. By encouraging FDI, these nations can attract talented managers to come in and train locals and thereby improve the international competitiveness of their domestic companies. Furthermore, locals who are trained in modern management techniques may eventually start their own local businessesfurther expanding employment opportunities. Yet detractors argue that, although FDI may create jobs, it may also destroy jobs because less competitive local firms may be forced out of business.
Answer to Question 2
A
Vesalius’s De Humani Corporis Fabrica was an important early work on the human species.
Animal carcasses like this South African wildebeest provide important nutrition for both hunters and
Percentages of adolescents indicating Benefits and Costs of employment.
Dagny Taggart is a graduating college senior and she is considering the costs of going to ...
Sadie is going to see a movie and is taking her four kids. each movie ticket costs $15 and ...
ATP, an important energy currency in cells