|
英国课程作业 report 表的内容 1.0 前言 2.0 外国直接投资和跨国公司的整体发展视图 2.1 外商直接投资是什么?1 2.2 跨国公司2 2.3 跨国公司为什么存在?2 3.0 文献观点3 4.0 外商直接投资进入英国4 5.0 外商直接投资对英国经济的影响10 5.1 福利10 5.2 潜在缺陷11 6.0 个人观点11 7.0 结论12
参考文献 13 1.0 前言
外国直接投资是什么?外国直接投资是一种投资,是企业保持持久利润的重要方式,是一种利用有效的方法来维持收支平衡。首先,这份报告是讨论外国直接投资的作用，讨论直接进入英国的外国直接投资的定义。第二,将探讨外国直接投资对英国的影响,以表明最近外国直接投资的下降趋势和下面的数据包括一个全面的潜在影响。应该分析外商直接投资的好处以及潜在的缺陷。最后,是否应该积极鼓励外国直接投资的进入，这是值得考虑的,如果它值得做，引入外国直接投资仍然是值得考虑的。 General View of FDI and MNEs A report on FDI into the UK Table of Contents 1.0 Introduction 1 2.0 General View of FDI and MNEs 1 2.1 What is FDI? 1 2.2 MNEs 2 2.3 Why MNEs Exist? 2 3.0 Literature View 3 4.0 FDI into the UK 4 5.0 The Effect of FDI on the UK economy 10 5.1 Benefits 10 5.2 Potential drawbacks 11 6.0 Personal View 11 7.0 Conclusion 12
Reference 13 1.0 Introduction
FDI, foreign direct investment, is a kind of investment that keeps a lasting interest in enterprises; is one of the effective methods to sustain the balance of payments. First, this report is to discuss the definition of FDI and FDI into the UK. Second, the effect of FDI on the UK will be explored that is proved by recent trends and figures below including a comprehensive prospective to the influence. The benefits of FDI should be analyzed, as well as the potential defects. Finally, whether foreign direct investment should be encouraged is worth deliberating, and if it is worth doing FDI deserves consideration. 2.0 General View of FDI and MNEs
2.1 What is FDI?
Foreign direct investment is in reference to long-period participation by different nations. It often refers to participation in joint-venture, multinational enterprises management, transfer of patent and assignment of technology. Many people to some extent consider FDI as a magic cube that could boost a nation to develop as an advanced country. On one hand, FDI could increase national economic development and provide more jobs; on the other hand, it could coordinate nation’s industrial structure, strengthen inward foreign trade and stimulate the development of outward foreign trade. It accelerates the total economic growth in recipient countries by technology transfer due to FDI. Therefore, every government has managed to take actions to encourage and strengthen FDI. 2.2 MNEs
An MNE was defined as a firm that owns and controls activities which belong to two or more different countries and maybe locates in a foreign country. MNEs took active part in competitive markets of oligopoly faultily and were invested by following the situations and strategies or as the reaction to foreign enterprises that march their home market. (Knickerbocker, 1973)
In the MNE theory, MNEs which have three types of particular strengths: internalization advantages, location and ownership can explain FDI. (Isabel 2009)
Internalization occurred compared with licensing possess the advantage of the decline of transaction costs, the limit of occurrence of technology imitation---in other words, it can reduce the fade and the similar products, and the stability of good reputation by skillful management of quality control and export which to some extent get benefit from ownership advantages . The advantages of ownership were definitely diverse. The MNE’s production process can be supervised; they can ensure an advantage of competition to defeat domestic firms; and they include intangible assets such as patents and management skills. Location advantages could make MNEs avoid tax treatments and increase the possibility to protect markets. The favorable competitive structure refers to the transport expenses and the capacity of production if they made producing abroad and the location was the main market located. 2.3 Why MNEs Exist?
The existence of MNEs can be accounted for two main reasons that the activity of FDI can not substitute for MNEs; there are remarkable advantages that cannot be ignored. John (2000) pointed out significant factors: inherent disadvantages of managing a company foreign against local firms---MNEs avoid these disadvantages and have many specific advantages, especially intangible assets. And using these assets are internalization advantages. Considerations including location, resources, government policies and the demand of customers are also taken in to encourage the existence of multinational enterprises. Finally, multinational enterprises need FDI to compete in the market.
MNEs always contain many subsidiaries, which makes the management more effective and efficient. Meanwhile, this leads to have a good knowledge of the market and consumers’ need. MNEs can maximum global interest through technology transfer and abundant information exchange. 3.0 Literature View
FDI could not be explained by the assumption of perfect competition argued by neoclassical theory, which was pointed out by Hymer (1976) and Kindleberger (1969). They connected FDI with the theory of MNEs and put emphasis on monopolistic advantage to explain why enterprises enter foreign markets. For instance, a MNE makes FDI into a host country to be responsible for production and exports to other host countries or even the world. (Bergstrand and Egger, 2004) Coughlin and Segev (2000) estimated that FDI could encourage and stimulate the FDI around, which meant that FDI into the UK could increase FDI into neighboring countries. Compared with their estimation, Davies (2004) saw a negative effect of FDI into neighboring countries --- neighboring GDPs increase FDI, which was analyzed by US FDI of Europe.
To grasp more markets but avoid trade frictions and to reduce the cost of production are two very particular and specific purposes for FDI (Markusen, 1984). Meanwhile, MNEs are advanced in exchanges of information, which is beneficial to FDI activities. Blonigen, Ellis and Fausten (2005) assumes that exchanges of information may lower the costs of getting information at local province and cause a positive effect of FDI by the decision of FDI location. 4.0 FDI into the UK
According to several newspaper reports, Britain had a 7% decline in inward investment in 2011, and a 15% drop in the financial services sector. Last year, the global FDI flows increased 16%, which was the first time to exceed the record before the financial crisis. But in 2011, total FDI flows of Britain was 539 billions dollars, which was only a quarter of that in 2007, 1960 billions dollars, at second position in the world. Due to the former financial crisis, the amount of FDI into the UK has been dropping. According to the annual World Investment Report, FDI of the UK is in the seventh place globally, behind the USA, China, Belgium, Hong Kong and Singapore.
In a word, the UK needs to absorb FDI sources and investors, and requires hunting more new markets and opportunities during the global economic times.
This report also includes some figures of FDI about the UK in former 15years and offers some analyses about the FDI trend. From the tabulation (outward), except 1991, from 1990 to 2000, FDI into the UK almost kept increasing. And 1999 besides 2000, there were two peaks of FDI history. Since 2001, the outward FDI has fallen substantially and considerably. In contrast, the amount of the total inward didn’t present a stable trend except that there were 5 years keeping a considerable growth from 1995 to 2000. Among the figures of reinvested earnings, there was only one negative record of 2001, and the outward was always much more than the inward. And other FDI activities of outward had more negative record than inward. The latest ten years trend and analyses can also be seen from tables below.
Before financial crisis, total net FDI abroad kept developing as well as equity capital, and Acquisition of foreign companies’ share and loan capital. And the amounts due to UK parents on the inter-company account differed from the amounts due from UK parents on a small scale except in 2006. They lost balance seriously.
The negative influence of financial crisis on the inward FDI of thee UK was deep and serious. The total net FDI into the UK developed stably before the crisis. The negative net increase in amounts due to foreign parents on inter-company account took a turn for the better when the crisis happened.#p#分页标题#e#
At the end of 2010, the net direct investment aboard by UK companies (outward investment) in 2000 was less than the previous year totally for about 1.7 billion pounds, which was very low in recent 10 years. The FDI outward flows maintained unstably with two peaks.
And outward FDI was influenced by geographic region. European maintained most parts and Asia, Australasia & Oceania and Africa were all going to the better. But, in the Americas, FDI went to the opposite directions because of net disinvestment as a decline of debts. Maybe, these declines resulted from the loans of companies. Meanwhile, FDI outward to Europe emerged a decrease from 2009.
The table left shown net earnings of outward FDI by UK companies. An increase of earnings of 2010 occurred, nearly 11.2 billion pounds, but lower than the years before 2008. The earnings from the Americans increased remarkably, with smooth increases from Asia, African and so on. A decrease in Europe may offset a part of the increases to some extent. According to the released data of Office for Nation Statistics, the companies of the UK in the USA were the main sources of the agreeable earnings that maybe occupied 18.3 percent.
The inward flows of the UK in 2010 were less than that in 2009 again. There was really a great shock to see the amazing decrease from Europe in inward flows, which was almost over 30 billions pounds decline. This consequence included a low level of equity capital, which maybe caused by the plan of European countries to find a balance of trade.
In contrast, the net earnings from inward FDI into the UK by foreign companies experienced a considerable increase breaking the low record recently, while the earnings didn’t recover from the financial crisis. The statistics in 2006 and 2007 remained high points. In the Asia, the record went to better but still negative. In conclusion, the FDI developed better than the previous year but still in the shadow of financial crisis. So the FDI in 2006 and 2007 were benchmarks. 5.0 The Effect of FDI on the UK economy
In general, foreign direct investment plays an important role in boosting the economy, promoting the development. And FDI does not turn to net foreign exchange inflows. Many multinational and transnational companies obtain loans locally to solve the financial problems, which is at great interest rates. This benefits the local nations. (Sam, 2007) 5.1 Benefits
The impacts of FDI on the host country are in such aspects: it can cause canalization of funds to offset the inadequacy of construction and development funds; it can import advanced technology; it can introduce great management and increase productivity; it also can stimulate the developments of industries, which caused by the vertical and horizontal competitions of companies. The most important, FDI can improve the ability of the host country to compete in the world.
Foreign investment in trade, finance and constructions investment is beneficial for the economy. And this can create more jobs and service markets, which in other words, is to stimulate the developments of industries. Foreign companies sometimes set factories in the UK and use them as European base, which boosts the economy in the UK. Improving productivity is also a benefit from FDI through the need of workers or other positions of the factories. The fact that FDI activities can encourage more foreign direct investment but when the number is too high, it comes to no attraction can not be ignored. Ashoka (2002) argued the same view that Boosting domestic investment and increasing productivity can benefit the host economy by FDI. 5.2 Potential drawbacks
In the economy, FDI can provide many benefits. But to the domestic enterprises, it is unfair. The companies which got foreign direct investment could have strong competitiveness immediately. This exclusive competitive advantage violates the fair competition principle of market economic and distorts the market mechanism, which makes the host country lose market balance.
And there is another negative effect. The multinational enterprises and the companies emphasize the purpose of achieving profits. Foreign direct investments are likely to deviate from the industry and strategic plans. The investors don’t agree to the policies, which makes the development disorder in the host countries.
Nowadays, many countries care about the balance of payments which also may be influence by FDI. Even, the balance will affect the development and prosperity of the countries. 6.0 Personal View
According to Investing in the UK, foreign investors are almost not given restrictions to invest in the UK so that the investments have no limit or bind. There are some sectors acknowledged by the government and the private which play important roles of investment priorities including ICT (information communications technology) and renewable energy. Some other sectors like automotive, and the creative industries are also included. But FDI has both negative and positive effects.
Many governments are inclined to pay attention to positive effects while ignore the negative. They think the more FDI get into, the more benefits can achieve. Achievements of FDI in a governor’s official career can’t be considered as judgments. The governments should have a comprehensive view on FDI, and then make it clear that FDI is just a method to economic development but not a purpose.
The government should make some proper limit to foreign direct investment to protect domestic industries and sustain the safety of the national economy. Meanwhile, some special industry like space, military should forbid FDI. And the country should avoid that FDI causes environmental pollutions. Every country likes importing high-tech industries of FDI. 7.0 Conclusion
In this report, what is FDI has been discussed. The reasons of the existence of MNEs are illustrated. And on the basis of literature review, FDI still has much to be explored. The UK is always the cluster of European foreign direct investment. FDI have both negative and positive effects on the UK, especially, on the economy. The statistics of recent years showed the FDI trend of the UK. Financial crisis was a obstacle of the FDI development, but the UK now come to restore. Foreign direct investment often brings technology transfer, which is beneficial to the UK. Many investors tend to regard the UK as a base because of many factories from FDI. But the UK must consider some restrictions of FDI to avoid the problems in the future. The balance of payments can show some problems of FDI to some degree. Whether domestic industries can survive during the unfair competitions should be pay more attention to protect the UK’s market balance and safety. FDI can boost an economy, as it is known, especially during the financial crisis, and the recovery. FDI also can offer a chain of jobs to solve the problems of employment, which is a great benefit to keep British a stable life. And now, the government should take actions to absorb more FDI since it was low in state in recent years. In addition, the government shouldn’t abandon the time to plan the FDI limit. Reference 1. Ashoka Mody 2002 “Is FDI Integrating the World Economy?” 2. Bergstrand, Jeffrey H. and Peter Egger (2004) “A Theoretical and Empirical Model of International Trade and Foreign Direct Investment with Outsourcing: Part I, Developed Countries” 3. Blonigen, Bruce A., Christopher J. Ellis, and Dietrich Fausten (2005) “Industrial Groupings and Foreign Direct Investment” Journal of International Economics, 65(1): 75-91. 4. Coughlin, Cletus and Eran Segev(2000) “Foreign Direct Investment in China: A Spatial Econometric Study.” The World Economy, 23(1), 1-23. 5. Davies, Ronald B. (2004) “Tax Treaties and Foreign Direct Investment: Potential Versus Performance,” International Tax and Public Finance, 11: 775-802 6. Hymer, S.H. (1976) “The International Operations of National Firms: A Study of Direct Investment” 7. Investment 8. Isabel Faeth, 2009 Determinants of Foreign Direct Investment – A TALE of Nine Theoretical Models Journal of Economic Surveys Vol. 23, No. 1, pp. 165–196 9. John Dunning, 2000, “The Eclectic Paradigm as an Envelope for Economic and Business Theories of MNE Activity”, International Business Review 9 .163–190 10. Kindleberger, C.P. (1969) American Business Abroad: Six Lectures on Foreign Direct 11. Knickerbocker, F.T. (1973), “Oligopolistic Reaction and Multinational Enterprise” 12. Markusen, James R. (1984) “Multinationals, Multi-Plant Economies, and the Gains from Trade,” Journal of International Economics, 16(3-4): 205-26 13. Sam Vaknin, 2007 Foreign Direct Investments (FDI) - Pros and Cons |
 |
|||
| 网站地图 |
