wandajackson
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Joined: 26 Jun 2019
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Properly managed FDI could make high returns. However Only registered users can see links on this board!
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requires an extensive analysis and investment therefore puts much of capital at risk. Moreover, if company will not perform in addition to expected, it may have got difficulty selling the currency project it created. Presented these return and danger characteristics of DFI, Companies must conducts country risk analysis to determine whether to make investments with a particular country or not.
Country risk analysis Only registered users can see links on this board!
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can be used to observe countries where the MNCs happens to be doing or planning to undertake business. If the degree of country risk of a clear country begins to enhance, the MNC may think about divesting its subsidiaries based there. Country risk might be divided into country`s political in addition to financial risk.
A severe way of political risk is the chance that the host country will administer over a subsidiary. In most cases, some compensation will be paid through the host government. In the opposite cases, the assets will be confiscated Only registered users can see links on this board!
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without compensation. Expropriation normally takes place peacefully or by force.
Beside political aspects, financial aspects need that they are considered in assessing land risk. One of the best clear financial factors will be the current and potential state of the country's economy. An MNC that exports into a foreign country Only registered users can see links on this board!
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or operates a subsidiary in that country is highly influenced by that country's demand to its products. This demand is actually, in turn, strongly influenced because of the country's economy. A recession as country can reduce need for MNC `s exports or goods produced by its subsidiary.
Economic growth indicators positively or negatively can impact demand for products. In particular, a low interest fees boost economy ad raise demand for MNCs` merchandise. Inflation rate influence customers purchasing Only registered users can see links on this board!
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power therefore their need for MNC`s goods. |
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