Foreign Direct Investment Concepts

The video explores foreign direct investment (FDI), its motives, benefits, and drawbacks. It discusses four main motives for FDI: resource-seeking, market-seeking, efficiency-seeking, and favorable government policy-seeking. The benefits of FDI include increased employment, human resource development, access to finance and technology, increased exports, competitive markets, and economic development. However, FDI can also have drawbacks, such as replacing local businesses, encouraging political corruption, contributing to pollution, and promoting cultural erosion. The video also covers political ideologies related to FDI, including radical views, free market perspectives, and pragmatic nationalism.

What is the primary focus of Foreign Direct Investment (FDI)?

• Investing in domestic businesses

• Investing in real estate

• Investing in foreign businesses

• Investing in stock markets

Which of the following is NOT a motive for FDI?

• Resource-seeking

• Cultural-seeking

• Market-seeking

• Efficiency-seeking

Why might a company engage in resource-seeking FDI?

• To access new markets

• To increase domestic sales

• To acquire specific resources at a lower cost

• To improve brand image

How does FDI benefit host countries in terms of employment?

• By reducing the need for skilled labor

• By creating new job opportunities

• By increasing automation

• By outsourcing jobs

Which of the following is a potential drawback of FDI?

• Improved environmental standards

• Encouragement of political corruption

• Guaranteed economic benefits

• Increased local business growth

What is a possible negative impact of FDI on local culture?

• Cultural enrichment

• Cultural innovation

• Cultural erosion

• Cultural preservation

Which political ideology views FDI as a tool for imperialist domination?

• Radical

• Pragmatic nationalism

• Liberal

• Free-market

What is the main principle behind the free-market view of FDI?

• Cultural integration

• Protectionism

• Specialization based on comparative advantage

• Government control over investments

How does pragmatic nationalism approach FDI?

• By promoting unrestricted FDI

• By focusing solely on cultural impacts

• By banning all foreign investments

• By allowing FDI only if benefits outweigh costs

Which country was known for its restrictive FDI policies until the 1980s?

• United States

• China

• Japan

• India