This topic contains a solution. Click here to go to the answer

Author Question: Why is it important to assess R&D costs when considering FDI? Given its costs, how can FDI ... (Read 100 times)

bucstennis@aim.com

  • Hero Member
  • *****
  • Posts: 532
Why is it important to assess R&D costs when considering FDI? Given its costs, how can FDI benefit the host country with access to technology, management skills, and employment?
 
  What will be an ideal response?

Question 2

Which of the following reasons encourages companies to make a product rather than buy it?
 
  A) Making a product gives managers greater control over the production process.
  B) Making a product lowers the risk associated with the production process.
  C) Making a product increases the company's flexibility to respond to market conditions.
  D) Making a product gives companies a great deal of power in their relationships with suppliers.



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

zoeyesther

  • Sr. Member
  • ****
  • Posts: 315
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




bucstennis@aim.com

  • Member
  • Posts: 532
Reply 2 on: Jul 7, 2018
Wow, this really help


LegendaryAnswers

  • Member
  • Posts: 341
Reply 3 on: Yesterday
:D TYSM

 

Did you know?

Glaucoma is a leading cause of blindness. As of yet, there is no cure. Everyone is at risk, and there may be no warning signs. It is six to eight times more common in African Americans than in whites. The best and most effective way to detect glaucoma is to receive a dilated eye examination.

Did you know?

Interferon was scarce and expensive until 1980, when the interferon gene was inserted into bacteria using recombinant DNA technology, allowing for mass cultivation and purification from bacterial cultures.

Did you know?

Colchicine is a highly poisonous alkaloid originally extracted from a type of saffron plant that is used mainly to treat gout.

Did you know?

Limit intake of red meat and dairy products made with whole milk. Choose skim milk, low-fat or fat-free dairy products. Limit fried food. Use healthy oils when cooking.

Did you know?

Every flu season is different, and even healthy people can get extremely sick from the flu, as well as spread it to others. The flu season can begin as early as October and last as late as May. Every person over six months of age should get an annual flu vaccine. The vaccine cannot cause you to get influenza, but in some seasons, may not be completely able to prevent you from acquiring influenza due to changes in causative viruses. The viruses in the flu shot are killed—there is no way they can give you the flu. Minor side effects include soreness, redness, or swelling where the shot was given. It is possible to develop a slight fever, and body aches, but these are simply signs that the body is responding to the vaccine and making itself ready to fight off the influenza virus should you come in contact with it.

For a complete list of videos, visit our video library