What two factors propel growth in foreign direct investment? ...

[xroflmao]

What two factors propel growth in foreign direct investment?
 
  What will be an ideal response?

Question 2

When it comes to ensuring ethical behavior, experienced managers follow a systematic process.
 
  Indicate whether the statement is true or false

[perkiness]

Answer to Question 1

The two main drivers of FDI flows are globalization and international mergers and acquisitions.
Globalization-Years ago, barriers to trade were not being reduced, and new, creative barriers seemed to be popping up in many nations. This presented a problem for companies that were trying to export their products to markets around the world. This resulted in a wave of FDI as many companies entered promising markets to get around growing trade barriers. But then the Uruguay Round of GATT negotiations created renewed determination to further reduce barriers to trade. As countries lowered their trade barriers, companies realized that they could now produce in the most efficient and productive locations and simply export to their markets worldwide. This set off another wave of FDI flows into low-cost, newly industrialized nations and emerging markets. Forces causing globalization to occur are, therefore, part of the reason for long-term growth in foreign direct investment. Increasing globalization is also causing a growing number of international companies from emerging markets to undertake FDI.
Mergers and Acquisitions-The number of mergers and acquisitions (M&As) and their rising values also underlie long-term growth in foreign direct investment. In fact, cross-border M&As are the main vehicle through which companies undertake foreign direct investment. Companies based in developed nations have historically been the main participants behind cross-border M&As, but firms from emerging nations are accounting for an ever greater share of global M&A activity.

Answer to Question 2

TRUE