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Factors influencing FDI p200-202 - Coggle Diagram
Factors influencing FDI p200-202
Political
Economic development incentives
host government government or local government may provide incentives to firms to internationalise in that country/city
Helps creates jobs for foreign country/city
Avoidance of trade barriers
Firms want to globalise in order not to pay tariffs
Demand
Customer access
A physical presence may be required
Broaden customer base is advantageous
Marketing advantages
Physical presence may enhance visibility of foreign firms products in host country
Buy local attitude may benefit them
Exploitation of competitive advantage
Exploiting use of patents or trademarks etc
Operating there rather than exporting provides an advantage
Customer mobility
Globalising companies may influence their suppliers to do the same
The firm may be copying their competitor in internationalising
Supply
Production costs
Labour
Tax
availability of skilled or unskilled labour
logistics
Transport costs
travel life-span of product
natural resources
The resources that are key for the firm
Access to key technology
Acquiring new technology increases competitive advantage
Cheaper than developing
