Foreign Direct Investment

Paper Summary:

This paper covers three investments in underdeveloped countries and discusses the relative advantages of foreign direct investment (FDI) on countries and their citizens. The paper offers three types of examples; an example in which the country benefited but the company investing did not, (Hyundai's invesment in North Korea) a case where the company investing reaped all or most of the benefits and the country was left bereft (Standard Oil in the U.S.) and an example where both the company and the country benefited from the FDI (American Motors in China).

Outline:
Definitions of Beneficial and Detrimental
Investing in North Korea by South Korean Companies
A Case Where the Company Alone Benefited
A Case Where both the Country and the Company Benefited
Measurement of Benefits--Political Considerations
Corporations and Ethical Practices
Egregious Failures, Notable Successes

From the Paper:

"Economists would argue that FDI and free trade benefit the populace generally. The same may not appear to be so in the country at the time of FDI or the imposition of free trade. The problem is that free trade disadvantages specific interests while benefiting the populace overall (Feulner, 2007). If, for example, foreign coal is less expensive than British coal, the public benefits through relatively lower heating costs, and industry from lower fuel costs. But at the same time, those who toil underground in the UK, their unions and the coal mine owners are disadvantaged. To the degree that these groups have political clout, they can skew the system to bring them specific advantages, even if the rest of society loses the benefit."

Sample of Sources Used:

• Chase, S. (1947). A Generation of Industrial Peace: Thirty Years of Labor Relations at Standard Oil Company. New York: Standard Oil Company.
• Chunli, L. a. (2003). The Chinese Automobile Industry and the Strategic Alliances of China, Japan, the US's Firms. Cambridge: MIT International Motor Vehicle Program.
• Dubois, C. P.-D. (2007). Thrombin-initiated platelet activation in vivo is vWF independent during thrombus formation in a laser injury model. Journal of Clinical Investigation , 953-960.
• Economist. (2007). 2008 World Almanac. London: Economist.
• Faiola, A. a. (2005, November 24). Perils of Investing in N. Korea Become Clear to a Pioneer. Washington Post Foreign Service , p. A23.

More papers on Foreign Direct Investment:

• Analytical Essay # 123047 : "Foreign Direct Investment in Viet Nam"
• Analytical Essay # 123731 : "Politics and Foreign Direct Investment"
• Essay # 69759 : "Foreign Direct Investment In India"
• Narrative Essay # 134264 : "Foreign Direct Investment in Vietnam"

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