POLI 358 Lecture Notes - Lecture 15: Foreign Direct Investment, Oast House, Offshoring

• School: McGill University
• Department: Political Science
• Course: POLI 358
• Professor: Leonardo Baccini

Document Summary

Poli 358 lecture 15: foreign direct investment and cooperation. Overview of fdi and mncs: why mncs have an interest in pushing for preferential liberalization- global value chains, offshoring, volume of fdi is sometimes larger than the volume of trade, 70-80% of trade is now by mncs. Role of domestic institutions: which policies and institutions can developing countries build to attract fdi. Mncs: enterprises that control assets in two or more countries. Fdi: investment made to acquire a lasting interest in enterprises operating outside the economy of the investor. Control" and lasting interest"- 10% ownership: different from capital speculation- only care about interest rates and fiscal condition, long term- more of an effect on socioeconomic condition, control- 10% ownership set by the imf. Fdi are a form of cooperation between non-state actors (mncs) and states. Which forms of cooperation: mncs jump tariffs, cut transportation costs, and get cheal abour and natural resources, states get capital, boost their productivity and increase employment.