INR 4702 Chapter Notes - Chapter 8: Factor Endowment, Vertical Integration, Capital Market
29 Dec 2017
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Portfolio investment: investors in one county purchase bonds, money market instruments or a small amount of stocks of a foreign. Foreign direct investment. (fdi): rms in the home: country acquire foreign assets by investing in (or establishing) a liates or subsidiary rms in host countries; involves the ownership or direct control of overseas assets. A oligopolistic corporation with ownership, management, production, and sales activities extending over multiple national jurisdictions. Mncs prove external capital, new technologies, and modern values. Predatory monopolists; they overcharge for their goods and services, limit the ow of technology, create dependent relationships. Realists: mncs as instruments of national power (of the home gov"t) Mncs are essentially national rms competing with other national rms around the world. Determinants of the growth of mncs and fdi. There are major advances in communications, transportation, and technology. National gov"ts and the international system are receptive to such activity. Market imperfections (arise when the price mechanism fails to promote a welfare-improving transaction)
