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EFFECT OF FDI ON INVESTOR COMPANY - Coggle Diagram
EFFECT OF FDI ON INVESTOR COMPANY
Expanding the market
R&D activities
Creating demand by employing people
Fleeing a competitive home market
Location advantages
Exploiting market access using Free Trade Agreement-Member countries
Physical proximity
Cheaper transportation costs
Optimizing cost
Cheap labor
Tax incentives
Subsidies
Taking advantage of lax regulations
Environmental aspect
Exploiting working conditions
Taking advantage of weak/corrupt legal systems
Risks
Political
Change in government
Reduction of tax incentives
Financial
Higher management costs
High initial investment cost
Social opposition
Legal
Weak intellectual property protections
Insufficient legal system for investment protection