Economics

THE ECONOMICS OF FOREIGN purpose INVESTMENTSINTRODUCTIONWith the advent of globalization , the convey of geographical dispersion of Transnational Companies have grown to such(prenominal) limits , that some each developing country forms their own unaffixed regulations inviting the alien direct investiture fundss by such transnational corporations . small-arm the distant direct investments have their own merits they are not left without limitations also . However the stint evolution of countries dress China , India , Brazil etc was mainly dependent on the overseas direct investments , the multinational corporations have been making in these countries . This , though br short , aims to bring out the frugals of the strange direct investments in the developing countries pointing out the relative merits and demerits o f such investments by the transnational corporations . The discussion is based on a specific case study of the takeover of ` shinny the Thailand s biggest stalling environ company by Temasek Holdings of SingaporeA BACKGROUNDIn September 2006 the largest cell headphone company `Shin of Thailand was taken over by the investors consider by the investment department of Singapore governance Temasek Holdings by acquiring 96 of the shares from all the major shareholders including those held by profligate prize minister Thaksin Shinawatra Investors led by Temasek bought 96 administer of Shin , which owns Thailand s biggest cell phone company , from investors including the family of former quality Minister Thaksin Shinawatra .

The deal provoked protests and a political affiliation that culminated in the coup that removed Thaksin in September - (Bloomberg word of honor 2006This clandestine deal has provoked wide criticisms on the shortcomings of the foreign ownership rules of Thailand and made the new establishment to consider revisions in the rules regulating the foreign investments However this criticism was vehemently protested by Lee Kuan Yew , the minister mentor of Singapore saying alone above board and can withstand any investigating and Nobody doubts that - nobody within the system doubts that he state of matter People who man the system are completely , perfectly above board - (Bloomberg News 2006However the Thailand government decided to move on investigate the Shin-Temasek business deal and proposed to send a missional post to Singapore to probe into this issueMeanwhile hefty fines and taxes have been obligate on the kins of the former Prime Minister for the sale of `Shin sharesFOREIGN DIRECT INVESTMENT As countries adopt more(prenominal)(prenominal) open , outward-oriented approaches to economic growth and study , the role of MNCs or transnational corporations becomes more important - (Module 5 Development Foreign companies look for every opportunity to relocate their production processes in those developing countries where cost-wise it is stinting to manufacture their products due to deregulation and liberalization of the industrial climateThese competency be cheaper sources of labour , raw materials and components or preferential government regulation (Module 5 Development Foreign direct investment (FDI ) has become a key component of national development strategies for all most all the countries over the Globe FDI is considered to be an essential tool for jump-starting economic growth through its bolstering of home(prenominal) enceinte , productivity and employment...If you want to get a beat essay, prescribe it on our website: BestEssayCheap.com

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