Economics

THE ECONOMICS OF FOREIGN purpose INVESTMENTSINTRODUCTIONWith the advent of globalization , the ask of geographical dispersion of Transnational Companies have grown to such(prenominal) limits , that closely all(prenominal) developing country forms their own unaffixed regulations inviting the extreme direct enthronement fundss by such transnational corporations . man the distant direct investments have their own merits they are not left without limitations also . However the save evolution of countries palm China , India , Brazil etc was mainly dependent on the afield direct investments , the multinational corporations have been making in these countries . This , though br short , aims to bring out the economics of the unconnected direct investments in the developing countries pointing out the relative merits and d emerits of such investments by the transnational corporations . The discussion is based on a specific case study of the takeover of ` scrape the Thailand s biggest carrel environ company by Temasek Holdings of SingaporeA BACKGROUNDIn September 2006 the largest cell surround company `Shin of Thailand was taken over by the investors cook by the investment department of Singapore governance Temasek Holdings by acquiring 96 of the shares from all the major shareholders including those held by gunstock prize minister Thaksin Shinawatra Investors led by Temasek bought 96 tidy sum of Shin , which owns Thailand s biggest cell phone company , from investors including the family of former prepare Minister Thaksin Shinawatra .

The deal provoked protests and a political stalemate that culminated in the coup that removed Thaksin in September - (Bloomberg news show 2006This clandestine deal has provoked wide criticisms on the shortcomings of the outside ownership rules of Thailand and made the new presidential term to consider revisions in the rules regulating the foreign investments However this criticism was vehemently protested by Lee Kuan Yew , the minister mentor of Singapore saying solely above board and can withstand any investigation and Nobody doubts that - nobody within the system doubts that he extract People who man the system are completely , absolutely above board - (Bloomberg News 2006However the Thailand government decided to get on investigate the Shin-Temasek business deal and proposed to send a missionary post to Singapore to probe into this issueMeanwhile hefty fines and taxes have been impose on the kins of t he former Prime Minister for the sale of `Shin sharesFOREIGN DIRECT INVESTMENT As countries adopt more(prenominal)(prenominal) open , outward-oriented approaches to economic growth and breeding , the role of MNCs or transnational corporations becomes more important - (Module 5 Development Foreign companies look for every opportunity to relocate their production processes in those developing countries where cost-wise it is stinting to manufacture their products due to deregulation and liberalization of the industrial climateThese dexterity be cheaper sources of labour , raw materials and components or preferential government regulation (Module 5 Development Foreign direct investment (FDI ) has become a key component of national development strategies for all most all the countries over the Globe FDI is considered to be an essential tool for jump-starting economic growth through its bolstering of home(prenominal) chief city , productivity and employment...If you want to get a beat essay, assign it on our website: OrderCustomPaper.com

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