International Business Faculty Papers
Permanent URI for this collection
Browse
Browsing International Business Faculty Papers by Subject "foreign direct investment"
Now showing 1 - 8 of 8
Results Per Page
Sort Options
Item CAFTA-DR effects on FDI inflows, growth and distribution of the workforce : a system dynamics approach(Southern New Hampshire University, 2010-06-29) Teekasap, Pard; Frutos, Dinorah; Samii, MassoodAs regional trading arrangements have spread over the last decades, the study of the relation between trade agreements and foreign direct investment still presents difficulties due to the multi-dimensional character of such relationship. This paper presents a system dynamics model that attempts to shed new light on how some of the Central American Free Trade Agreement (CAFTA-DR). Specifically we look at how the growth and distribution of the workforce in the non-agricultural (or industrial) and agricultural sector in six CAFTADR country members. The model results indicate that the provisions we considered tend to industrialize member countries as well as expand the agricultural sector in some countries in the long run. In addition, the model indicates that the treaty provisions drive up the GDP per capita for all member countries.Item CAFTA-DR effects on FDI inflows, growth and distribution of the workforce in Costa Rica : a system dynamics approach(Routledge, 2010-10) Frutos, Dinorah; Teekasap, Pard; Samii, MassoodAs regional trading arrangements have spread, enlarged and deepened over the last decades, the study of the relation between trade agreements and foreign direct investment still presents difficulties due to the multi-dimensional character of such relationship. This paper attempts to shed new light on how some of the Central American Free Trade (CAFTA) policies will impact FDI inflows on the manufacturing and agricultural sectors in Costa Rica. Specifically we look at how the growth and distribution of the workforce is affected by the treaty. The results show that the agreement provisions will have a positive effect on foreign direct investment. From these results it is possible to estimate that in the long run, the implementation of CAFTA has a higher probability of generating the intended benefits. System dynamics modelling is used in this paper.Item Can country continuously compete on cheap labor cost? A system dynamics approach to FDI policy analysis(Southern New Hampshire University, 2010-06-28) Samii, Massood; Teekasap, PardThis paper studies the interaction of FDI, wages and employment of workers under different policies in countries that use cheap labor cost strategies such as Thailand. The interactions are analyzed by using system dynamics modeling. The model simulation shows that FDI drives salaries up when the demand for workers reaches the limit of the working population. A higher salary, in turn, causes low labor cost seeking FDI to withdraw their investment. Government policies aimed to sustain cheap labor cost seeking FDI are examined. Policies to subsidize foreign operation such as providing tax breaks and reducing the time to set up a new firm can stimulate FDI in the short term but in the long term the foreign firms still withdraw their investments due to high salaries. An increase in the working population or a reduction in firm hiring process time, on the other hand, does not affect the volume of FDI. Thus, the country cannot rely on a low labor cost strategy on the long term.Item Foreign direct investment under uncertainty : an options pricing strategy(Southern New Hampshire University, 1999-10-19) Broaden, CharlotteItem Foundations of foreign direct investment(Southern New Hampshire University, 1999-09-29) Broaden, CharlotteTo adequately understand foreign direct investment, one must trace the origins of international trade beginning with comparative advantage theory, which views trade from the standpoint of perfect competition, to the new classical theories that focus on imperfect markets. The debates that are raised in these theories touch on many issues, however, central to the underlying theme in all of these theories are the issues of efficiency and equity as they impact both the home and host countries. Understanding the theories in and of themselves is not enough to explain the concept of foreign direct investment. We need an instrument to tie the two together and that instrument or more preferably, institution, is the multinational corporation (MNC). The literature is inconclusive in providing a precise definition of the MNC. A generally accepted theorem is that MNC’s are composed of a corporate structure where operations are in two or more countries on such a scale that growth and success depend on more than one nation, and where decisions are made on the basis of global alternatives (Parry 1973). For the basis of this paper, we shall also accept this premise. This paper will examine how international trade theory impacts foreign direct investment decisions. We will investigate the idea of a MNC moving from the notion of perfect competition to the concept of dealing with market imperfections as well as follow the evolution to the "new paradigm" of international trade.Item Mitigating risks in internationalization decisions : the choice of the optimal entry mode(Southern New Hampshire University, 2008-04) Samii, Massood; Aliouche, E. Hachemi; Wright, RoxanaIn this paper we propose an innovative prescriptive model for internationalization strategy based on decision analysis theory that allows for optimal decision making regarding the choice under uncertainty between alternative international entry and/or expansion modes. Based on a case study of McDonalds’ expansion in a developed market and in an emerging market, we discuss the decision making implications by emphasizing the inclusion of risk and uncertainty and the importance of sensitivity analysis on the evaluation of the model results. The analysis compares the internationalization choices of franchising and foreign direct investment, as two distinct levels of foreign commitment. The findings suggest that in relatively stable environments it is relatively easier to mitigate the risks through tactics such as cost control, so that a higher level of commitment is justified under favorable macro-environment conditions. In less stable or unfamiliar countries, the risks of day-to-day operation may be too high to be mitigated, such that a lower risk alternative is always optimal, and discrete improvements of the political and economic climate are irrelevant.Item A note using mergers and acquisitions to gain competitive advantage in the United States in the case of Latin American MNCs(Elsevier Science Inc., 2001) Milman, Claudio D.; D’Mello, James P.; Aybar, C. Bulent; Arbelaez, HarveyThe "new" economic and business climate in Latin America, fostered by multilateral trade agreements such as NAFTA, MERCOSUR, and the ANDEAN Pact, suggests that Latin American (LA) firms must become more aggressive and competitive in order to survive. Foreign direct investment in the form of mergers and acquisitions (M&A) is often an effective way of competing in a tough global environment. Using transactions data collected from Security Data Company's Worldwide Merger and Acquisition database, this paper analyzes the relative involvement of firms from five LA countries (Argentina, Brazil, Chile, Mexico, and Venezuela) in acquiring targets in the United States of America. Transaction characteristics examined and summarized include the annual distribution (1985-1998) of the deals, the industrial sector of the target firm, the form of acquisition method used, and the form of ownership of the target firm. The trends are analyzed, and implications for managers are indicated.Item System dynamics approach to the analysis of interaction of foreign direct investment and employment in Thailand(Taiwan Institute of Business Administration, 2010-01) Samii, Massood; Teekasap, PardThis research studies the effect of FDI policy on the wages and employment in Thailand. A system dynamics model that simulates the interaction between labor market and foreign direct investment in Thailand is used. The results show that having an FDI policy results in higher FDI in the short term but lower FDI in the long term. The effect of the policy on unemployment in the short term is not significant but the unemployment ratio is higher than it would be without such policy in the long term. Regarding the salary, having an FDI policy results in having higher average salary in both the short-term and the long term.