ipl-logo

Foreign Investment In Pakistan

1319 Words6 Pages

be able to turn the existing trade deficit in its favour. Through improvement in communications, Pakistan can thus effectively integrate its domestic market as well as explore landlocked neighbouring markets through exports.
Completion of CPEC is likely to improve Pakistan’s economic, commercial, and geostrategic environment. As the proposed Chinese investment more than doubles all foreign direct investment in Pakistan since 2008, it will attract international investors in Pakistan. This will help to improve the perceived external image of the country, an image that is not always in line with current situations and tends to be more negative than merited by actual conditions and one that causes a psychological obstacle to the flows of foreign …show more content…

It is also the most common strategy for internalization of companies from emerging countries (UNCTAD WIR, 2013). The MNEs that are prompted by market-seeking OFDI invest in most of the cases in a specific country or a nearby country in order to supply commodities. Many of these markets have previously been serviced by exports from the investing MNE. The exporting has been ended due to an imposed tariff or other cost raising barrier by a host country or the market size makes local production for economical. Market-seeking investment encases multi fold benefits that the investing company can leverage. The underlying motives vary from sustaining or protecting existing markets to exploiting or promoting new markets. The location factors of market-seeking OFDI are commonly market size, prospects for market growth and indigenous resources and capabilities. Additionally retaining competitiveness can pull investment. Furthermore, the engagement in market-seeking OFDI improves the company’s market power on local, regional and international level. Engaging in this type of strategic market-seeking investment derives often for defensive and aggressive …show more content…

A common way to make strategic asset-seeking investments is through acquiring assets of foreign company in order to replenish or increase the company’s current assets. Strategic assets are often sought through merging or acquiring assets of foreign companies to gain competitive advantage in a new market and to promote long-term strategic objectives. The MNEs that are prompted by this type of OFDI are commonly established MNEs that aim for an integrated international or regional strategy, and new foreign direct investors that look for acquiring a competitive strength in a foreign market. The main motive for strategic asset seeking OFDI is to leverage of minimizing a particular cost or marketing advantages over the competing MNEs international portfolio of physical assets and skilled labour competences. Thus, strategic-asset seeking OFDI enable companies to increase their ownership-specific advantages or decline other companies’ competitiveness. The European manufacturing industry with its modernized technology has prompted Chinese investment during the recent economic crisis in Europe. The investment allows Chinese manufacturing industry to move up its’ value chain and advance their position in the domestic market. Chinese has displayed specific interest in industrial machinery and automotive industries. Companies such as Volvo, Putzmeiser and Ferretti have attracted Chinese

Show More
Related
1642 Words | 7 Pages

China has a few focal points as a nation to put resources into, for example, the shoddy work accessible so as to make quality items with the most minimal costs conceivable thus giving customers a dependable and moderate item. China one of the quickest and greatest developing economies on the planet, therefore, giving a major market because of its populace and one in which this sort of items may have a promising element to the costumers. On the off chance that MABE needs to enter other Asian nations later on, at that point China would give a coordination advantage for them in the up and coming a very long time because of the ports and fringes with numerous different nations. China dependably gives a protected market to any industry related with home or electronic

Read More
1003 Words | 5 Pages

Without government intervention infant industries will not benefit from low taxes and incentive for exports and will fail to compete in the free trade causing unemployment in the country. Secondly with resource allocation, Chinese government controls the resources based on comparative advantage helping domestic firms to specialize based on cheapest resource available. The availability of the resources increases the output of domestic firms; this will improves the balance of payment of a country because of the increase in value of export compared to the import. Lastly the dynamic mechanism states that growth can be sustained by introduction of new technologies, foreign investments and from imports. The increasing number of foreign direct investment has benefited China in

Read More
755 Words | 4 Pages

Literature review: The literature studied state following are the push and pulls factors 1. Decline in the per capita share in the resources such as agricultural land and stagnating agriculture, change in technology, exhaustion of mines, timber or other resources and closure of certain industries in some of the regions. 2. Mechanization leading to unemployment.

Read More
3387 Words | 14 Pages

Contents Background of the company 3 Growth of the company 3 Chinese automotive industry 3 External Environment Analysis 5 Business Strategy 5 Internationalization 6 Competitive landscape 8 Chery automobile - During the recession 9 Chery automobile - After recession 10 Exhibits 11 References: 15 Background of the company Chery Automobile Co. Ltd is a government owned automobile manufacturing company in China founded in the year 1997.The product portfolio of Chery consists of 15 models which includes minivans, passenger cars and SUVs including the QQ compact, the A5 sedan, and V5 crossover. It also offers full electric and hybrid models. The exports of Chery account to 25% of its total production and it is the

Read More
1759 Words | 8 Pages

Analysis of Tesla in the Dutch business environment The following section will examine the rationale behind Tesla’s mode of business in the Netherlands using the OLI Framework proposed by John Dunning (1988). The framework covers company-specific (ownership) advantages, location-specific (locational) advantages and business mode (internalisation) advantages. According to Dunning, analysis of these 3 aspects can be used to determine whether or not a firm should engage in FDI in a specific country. 3.1 Ownership advantages Tesla has a number of ownership advantages that it can leverage when conducting business internationally, namely: intellectual property, existing partnerships, vertical supply chain integration and availability of

Read More
1404 Words | 6 Pages

First and foremost, one must acknowledge the plainly visible fact that the Chinese economy has grown exponentially since the process of integration into the global economic system began. China 's comparative advantages, particularly in the labor sector, has transformed it into the second largest recipient of FDI in the world.1 Over the course of the last 20 years, exports have grown approximately 17.1 percent per year.2 This ultimate result of this investment and trade has been an overall growth rate 8 percent per annum,3 which would have been completely unattainable without the country 's engagement in globalization. Foreign investments have

Read More
1267 Words | 6 Pages

That is the combination of a market development and the product development. Where the organization will try to grow their market share by introducing new offerings in the new market, which is UAE. However, this method is also the most risky strategy due to the both the product and the market development being

Read More
1643 Words | 7 Pages

1.0 Introduction The main objectives of this report is to identify and critically evaluate the strategies used by a chosen Multinational Company (MNC) to internationalize. Firstly, this report will clearly analyzed the current internalization strategies that being used by the chosen Multinational Company (MNC) which is Lenovo Group Limited and its relationship with the theory of internalization. Secondly, a relevant of internalization strategies will be proposed in this report which is suitable for the internalization of Lenovo Group Limited.

Read More
871 Words | 4 Pages

The history already observed such a situation, when BMW built the production facilities in Spartanburg, South Carolina. In 1990’s the new BMW factory in North America turned the struggling region into the new center of the automotive production and

Read More
2329 Words | 10 Pages

What is normally suggested is that if a firm is producing, manufacturing or reselling goods that they usually export since it is the easiest and least risky method. The risk that occurs if this type of strategy is used is that the firm depends on the company that will be exporting to and their customers in order for their product to be known. Yet other strategies include a joint-venture, licensing and franchising, foreign direct investment, and strategic alliances which even though they have more risk than just exporting they are more likely to be used than full ownership. These strategies give the firm the opportunity to still have some control, at different levels, of how the product will be managed in the foreign country. An example of this is Kia Motors direct investment in Slovakia in 2004 or Volkswagen’s joint-venture with Skoda for a period of time in 1991.

Read More
2296 Words | 10 Pages

In 1974, Delhaize took its first step of internationalization by entering the US market. He progressively acquired market shares in US and continued its internationalization process by entering Southeastern Europe in the early 1990s, and the Indonesian market in 1997. In this section we will try to understand the pressures that pushed Delhaize to internationalize. George Yip provides a framework to analyze the “globalization drivers” that are most likely to influence a company’s decisions to expend its business internationally. The four drivers of internationalization that he identified are: market drivers, cost drivers, government drivers and competitive drivers.

Read More
2015 Words | 9 Pages

Introduction The mass merchandiser Wal-Mart, founded 1962, is stated as the world largest retailer with over 11,100 stores in ~ 27 countries. The market is over $275 billion and Wal-Mart’s rank among the top ten companies in the S&P 500 index. Wal-Mart’s philosophy is to provide everyday low prices and superior customer service. They invested in its unique cross-docking-inventory-system, which is one of the largest supply chain in the world.

Read More
1047 Words | 5 Pages

CHAPTER 1: INTRODUCTION 1.0 Introduction This study conducted to investigate the impact of foreign direct investment (FDI) on economic growth in Malaysia for the period 1980 – 2011 using the annual time series data. Foreign Direct Investment (FDI) and Gross Domestic Product (GDP) are the main determinant of economic growth on any country (Pradeep, 2011). FDI can be defined as a cross border corporate governance mechanism through which company obtains productive assets in another country and prolonged to include the investment which made to attain lasting interest in enterprises operating outside of the economy of the investor (Gopal, 2012). According to World Bank, GDP refer to the value of final goods and services that produce in a country

Read More
1196 Words | 5 Pages

INTRODUCTION Geo Politics is defined as the impact created by a country on other neighbouring countries due to its Geopolitical position. This impact also affects the politics of the region as a whole. Pakistan is at a location which is of great importance in political ,strategic and economic sectors. It has been centre of activities of great powers since the start and has witnessed intervention of three great powers i.e Britain, USSR, and USA. Pakistan is located in Southern Asia and shares border with four countries which include India, Afghanistan, China and Iran all of which are of great importance in the international politics and play a major role in it.

Read More
1041 Words | 5 Pages

Pakistan is facing many challenges from the lack of access to basic health care services, to poverty, illiteracy, women’s low status, unhygienic water supplies and sanitation and the most important problem Pakistan is facing is unemployment. Pakistan has one of the highest unemployment rate in the world. According to UN Pakistan has approximately 5.8% unemployment rate. The unemployment rate in Pakistan is increasing and due to increasing amount of unemployment many crime takes place, Pakistan has a lot of natural resources but due to poor governance we can’t use them with full potential. You can find many educated people for example doctors, engineers and graduates roaming around for job in Pakistan but couldn’t find a job worth their education.

Read More

More about Foreign Investment In Pakistan

Related Topics

Open Document