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Please explain some of the most important benefits and the barriers to global investment.

Please explain some of the most important benefits and the barriers to global investment.

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Important benefits to global investment
1. It helps in diversification of investment and helps to offset any economic downturn in domestic country.
2. Investment in developing countries provide higher growth as compared to a saturated local currency.
3. Some countries provide tax havens hence it becomes more rewarding to park funds in such countries as US taxes are very high.
Barriers to global investment
1. Weakening of the foreign currency would eat away any potential returns as it would gt less dollars and there would be erosion of wealth.
2. Political instability in the foreign country poses a huge risk as it affects the returns . There is increase in risk and the returns can be negative.
3.Liquidity of investments is a huge issue in developing countries. Hence there is risk of cash crunch in times of recession.

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