Author Question: What makes China popular for FDI? What factors contribute to the long-term popularity of FDI in ... (Read 136 times)

BrownTown3 · **on:** Jul 7, 2018

What makes China popular for FDI? What factors contribute to the long-term popularity of FDI in advanced economies?

What will be an ideal response?

Question 2

A firm that pursues foreign direct investment to take advantage of government incentives is demonstrating a(n) ________ motive.

A) efficiency-seeking
B) novelty-seeking
C) asset-seeking
D) market-seeking

Ashley I · **Reply #1 on:** Jul 7, 2018

Answer to Question 1

According to A. T. Kearney's FDI Confidence Index, China ranks among the top destinations for foreign investment (www.atkearney.com). China is popular because of its size, rapid growth rate, and low labor costs. It is an important platform where MNEs manufacture products for export to key markets in Asia and elsewhere. China also holds strategic importance for its long-term potential as a target market and source of competitive advantage.
Advanced economies such as Australia, Canada, Japan, Netherlands, the United Kingdom, and the United States long have been popular destinations for FDI. These countries all share high per-capita GDP, strong GDP growth, high density of knowledge workers, and superior business infrastructure, such as telephone systems and energy sources destinations.

Answer to Question 2

A