Explore the foreign direct investments in the big emerging market as well as to carry out the preliminary research of the dissertation. This proposal consists of 3 main parts; the introduction to problem statement and purpose of study,

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TABLE OF CONTENTS:

. ABSTRACT 2

2. INTRODUCTION TO PROBLEM STATEMENT AND THE PURPOSE OF STUDY 2

2.1 INTRODUCTIONS TO PROBLEM STATEMENT 2

2.2 PURPOSE OF THE STUDY 3

3. LITERATURE REVIEW 3

3.1 INTRODUCTION TO THE EXISTENCE OF THE FDI 3

3.2 WHY TO INVEST IN THE BIG EMERGING MARKET 4

CHART 1 5

3.3 ANALYZE THE CURRENT SITUATION OF THE BEM AND THEIR COMMON TRAITS 5

3.4 THE CHALLENGES IN THE BEM FOR FDI 6

4. METHODOLOGY 6

4.1 PURPOSE OF STUDY AND TYPE OF INVESTIGATION 6

4.2 SAMPLING DESIGN 7

4.3 DATA COLLECTION DESIGN 7

4.3.1 Secondary data 7

4.3.2 Primary data 7

4.4 POTENTIAL DIFFICULTIES FOR DATA COLLECTION 8

4.5 DATA ANALYSIS 8

REFERENCE 9

APPENDIX A 11

APPENDIX B 12

Topic: Foreign Direct Investment in the Big Emerging Markets

. Abstract

The purpose of this proposal is to explore the foreign direct investments in the big emerging market as well as to carry out the preliminary research of the dissertation. This proposal consists of 3 main parts; the introduction to problem statement and purpose of study, a brief review of relative references and the section of methodology which includes the type of study, sampling design and the way of data collection.

2. Introduction to problem statement and the purpose of study

2.1 introductions to problem statement

According to the IMF BPM5, paragraph 359, FDI is the category of international investment that reflects the objective of a resident entity in one economy ("direct investor" or parent enterprise) obtaining a 'lasting interest' and control in an enterprise resident in another economy ("direct investment enterprise"). The "lasting interest" implies the existence of a long-term relationship between the direct investor and the direct investment enterprise and a significant degree of influence on the management of the latter. Direct investment involves both the initial transaction establishing the relationship between the investor and the enterprise and all subsequent capital transactions between them and among affiliated enterprises, both incorporated and unincorporated. As mentioned by Weigel (1997) during the last two decades, foreign direct investment has become the largest source of external funding for investment in developing countries. As social and economic events bring about unraveling opportunities in the big emerging market (BEM), many multinational corporations have made substantial investments in the countries as an integral part of their global expansion strategies (Garten1998). Emerging markets are countries in the world that are expected to experience lots of growth. Investing in these countries has lots of potential for big returns, but it also carries lots more risk than typical domestic investing.1 The underlying principle of this study will be focused on the notion of FDI in the big emerging markets. The ten big markets selected are South Africa in Africa; China, India, Indonesia, and South Korea in Asia; Poland in Europe; Argentina, Brazil, and Mexico in Latin America; and Turkey in the Middle East. According to UN estimates, foreign direct investment flow to the world's developing countries grew from $31 billion in 1990 to $80 billion in 1993. All of the ten largest recipients of foreign direct investment in the period from 1988 to 1992 were from the Big Emerging Markets. During the period from 1989 to 1993, U.S. direct investment in the BEMs increased from $6.1 billion per year to $13.7 billion, an increase of 125 percent. (U.S. International Trade Commission 1996). Being aware of this, it becomes much more important to do some investigation on FDI and the BEMs. Examining the strategic factors for the FDI to process in a big emerging market is another thorny issue to be investigated. .

2.2 Purpose of the study

In exploring the specific factors that FDI need to consider in the emerging market, the purpose of this study will consist of three objectives:

) To explore the current situation of the FDI and the reason of using FDI as market entry strategy.

2) To investigate the strategic purpose of FDI in the big emerging markets. (Why?)
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3) To explore the criteria used by the foreign direct investor in strategically investing in the big emerging market. (How?)

3. Literature Review

3.1 Introduction to the existence of the FDI

Foreign direct investment, in its classic definition, is defined as a company from one country making a physical investment into building a factory in another country. The direct investment in buildings, machinery and equipment is in contrast with making a portfolio investment, which is considered an indirect investment.(Jeffrey P. Graham and R.Barry Spaulding 2004)Frank Bradley (1991 p269-270) claimed that FDI refers to the ...

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