If there are two countries you are considering for
foreign direct investment that are similar in most
respects and only the balance of payments differintiates them,
what are the top 3 items you would look for
specifically and why these are important for the current and future
success of your FDI. Not general accounts or categories Keep in
mind the CEO has a marketing background, so you want to fully
explain all international finance concepts.
Homework Answers
I will look first for amount of foreign loans to country so that there is not excess debt and country can repay. This will matter in cases like liquidating my investment etc so that I can easily move my savings and profits back from the country. Here I will also note whether the country allows repatriation of profits earned back to my own country so that funds do not get locked there
Secondly I would look at foriegn investments like fdi in the country. This will give idea about how favourably the country is viewed by experts and what is the growth potential of country
Thirdly I will look at its exports to understand its comparative advantage. If it exports substantially then there is quite good reason to believe that my own firm will also be able to export from this country
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