Reasons for Foreign Direct Investment Derived demand results when businesses move abroad and encourage their suppliers to follow them, creating chain or pattern of direct investment in a market Copyright 2001 by Harcourt, Inc. All rights reserved 15-6
Copyright © 2001 by Harcourt, Inc. All rights reserved. 15-6 Reasons for Foreign Direct Investment Derived demand • results when businesses move abroad and encourage their suppliers to follow them, creating chain or pattern of direct investment in a market
Reasons for Foreign Direct Investment n Government incentives Fiscal incentives tax holidays, allowances, credits and rebates Financial incentives special funding for land or buildings, loans and guarantees, wage subsidies Nonfinancial incentives guaranteed purchases, protective tariffs, import quotas, local content requirements, infrastructure Copyright 2001 by Harcourt, Inc. All rights reserved
Copyright © 2001 by Harcourt, Inc. All rights reserved. 15-7 Reasons for Foreign Direct Investment Government incentives • Fiscal incentives – tax holidays, allowances, credits and rebates • Financial incentives – special funding for land or buildings, loans and guarantees, wage subsidies • Nonfinancial incentives – guaranteed purchases, protective tariffs, import quotas, local content requirements, infrastructure