Foreign Direct Investment and Cross-Border Acquisitions

Project Description:

While making a decision about investing abroad a company has to consider a wide range of factors comprising the investment climate of the recipient state. Estimation of the business climate is important since it provides investors with information on potential opportunities and benefits with conducting economic activities in a certain jurisdiction, but also barriers and threats.

Read the following articles and then answer the questions below.

•      Investment Climate https://www.investopedia.com/terms/i/investmentclimate.asp#

•      Investment Climate - Development Finance International https://www.development-finance.org/en/topics-of-work/foreign-private-capital/investment-climate

1.     Explain in your own words what "Investment Climate" is. Which factors influence a country's investment climate?

2.     Assume a U.S. company producing women's clothes has an intention to open a manufacturing center abroad. Identify a country that, in your opinion, would be the best choice for this purpose, and design an investment climate profile of this country.

Note 1: Refer to Chapter 16 of the textbook and follow Exhibit 16.9 and Exhibit 16.10 as the templates.

Note 2: For Political & Governance Indicators, Sovereign rankings, country's statistics, feel free to use the following online resources:

o   Ease of Doing Business - https://www.doingbusiness.org/en/rankings

o   Corruption Perceptions Index - https://www.transparency.org/en/countries/afghanistan?redirected=1

o   Freedom House - https://freedomhouse.org/countries/freedom-world/scores

o   OECD County Risk Rating - http://www.oecd.org/trade/topics/export-credits/documents/cre-crc-current-english.pdf

o   Sovereign Rating Moody's - https://countryeconomy.com/ratings/moodys 

o   Sovereign Rating Standards & Poors - https://countryeconomy.com/ratings/standardandpoors

o   World Bank Open Data - https://data.worldbank.org/