Economics

THE ECONOMICS OF FOREIGN purpose INVESTMENTSINTRODUCTIONWith the advent of globalization , the implore of geographical dispersion of Transnational Companies have grown to such(prenominal)(prenominal) limits , that some both developing country forms their own unaffixed regulations inviting the upstage direct investiture fundss by such transnational corporations . solidus the distant direct investments have their own merits they are non left without limitations also . However the scotch evolution of countries tell apart China , India , Brazil etc was mainly dependent on the international direct investments , the multinational corporations have been making in these countries . This , though br short , aims to bring out the economicals of the alien direct investments in the developing countries pointing out the relat ive merits and demerits of such investments by the transnational corporations . The discussion is based on a specific case study of the takeover of `shinbone the Thailand s biggest cellular tele prognosticate environ company by Temasek Holdings of SingaporeA BACKGROUNDIn September 2006 the largest cell phone company `Shin of Thailand was taken over by the investors check off by the investment department of Singapore governance Temasek Holdings by acquiring 96 of the shares from all the major shareholders including those held by stock prize minister Thaksin Shinawatra Investors led by Temasek bought 96 persona of Shin , which owns Thailand s biggest cell phone company , from investors including the family of former blossoming Minister Thaksin Shinawatra .

The deal provoked protests and a political standstill that culminated in the coup that removed Thaksin in September - (Bloomberg news program 2006This clandestine deal has provoked wide criticisms on the shortcomings of the foreign ownership rules of Thailand and made the new regimen 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 exclusively above board and can withstand any investigation and Nobody doubts that - nobody within the system doubts that he evoke People who man the system are completely , abruptly above board - (Bloomberg News 2006However the Thailand government decided to overture investigate the Shin-Temasek business deal and proposed to send a missioner post to Singapore to probe into this issueMeanwhile hefty fines and taxes have been compel on the kins of the former Prime Minister for the sale of `Shin sharesFOREIGN DIRECT INVESTMENT As countries adopt to a greater extent(prenominal) open , outward-oriented approaches to economic growth and festering , 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 cleverness 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) capital , producti vity and employment...If you want to get a beat essa! y, localise it on our website: BestEssayCheap.com

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