Globalisation: International Trade and Foreign Direct Investment Essay

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STUDENT ID NO. AND INSTITUTE EMAIL ADDRESS: e.g. S1234567@mail.grimsby.ac.uk
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PROGRAMME TITLE:
Fda Business management
MODULE TITLE:
International Business issues
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Essay
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EXTENTION DATE HAND IN:
12/11/13
NAME OF TUTOR:
Karren Burrows

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FDA Business Management
International Business Issues
Karen Burrows

'Foreign Direct investment (FDI) is the defining activity of Multinational corporations (MNCs)' This essay will evaluate the above statement, it will define all keys terms and analyse relating theories on FDI and how it may have both a negative and positive effect on MNC, Home companies, host countries and consumers. Key Terms
Globalization, meaning to trade on an international level
Foreign direct investment is where a parent company funds a subsidiary company overseas.
Multinational Corporation is a company that has businesses throughout the international market.
Internalization Theory, where companies expand their businesses overseas via FDI to 'internalise' activities where there are short comings in the market place
Oli paradigm a theory proposed by Dunnings, O= ownership, L= location and I internalization.

‘Globalization means the ability to produce and /or sell goods/services in global markets in open competition with others’ (Govil and Rashmi 2013: 65). Meaning that globalisation has seen an increase in products or services across national borders around the globe. Furthermore, Govil and Rahsmi also refer to globalisation as empowering consumers, giving much more freedom and choice of goods and services. This is mostly due to the increase in competition that globalisation brings. Competition benefits both the company and the consumer by increasing choice, often reducing barriers to trade. Competition that is created by globalisation has benefited both consumer and companies, its increased innovation of goods/services which has increased choice for consumers, its utilised materials, strengthen trade relations and international relations it has also aided comparative advantages in such that countries can concentrate on production to
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