FDI is when a company invests in infrastructure, equipment, or organizations in a foreign country, not just in shares of foreign companies.
After the 2008 financial crisis, FDI declined but improved by 2015.
FDI increased in High Income Countries (HICs), especially in USA and Europe. It also increased in Newly Industrialized Countries (NICs).
Asia remained the main recipient of FDI in NICs/Low Income Countries (LICs).
FDI slowed down in Africa, Latin America and the Caribbean.
Europe became the world’s largest investing region.
Example: FDI in Cuba is expected to rise due to reestablished ties with the USA.
Transnational companies (TNCs)
TNCs are organizations operating in many countries.
They provide advantages and disadvantages to their host countries.
They hold great economic power and employ over 50 million people worldwide.
TNCs must adapt to economic conditions by using strategies such as rationalization, reorganization, and diversification.
Example: Tata Group, a TNC, operates in over 80 countries and employed about 600,000 people in 2015. It diversified into various industries including software, steel, hotels, and beverages.
Liberalization & globalization
Economic liberalization allows companies like Tata to compete internationally but also exposes them to competition.
The company responded by streamlining operations and focusing on key industries.
Example: Tata Steel doubled its output while cutting its workforce. The company also embraced globalization by acquiring foreign companies.
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Geography HL
Unit 4 - Power, Places & Networks
Exploring FDI Trends: A Look Into Global Investments & TNC Influence
FDI is when a company invests in infrastructure, equipment, or organizations in a foreign country, not just in shares of foreign companies.
After the 2008 financial crisis, FDI declined but improved by 2015.
FDI increased in High Income Countries (HICs), especially in USA and Europe. It also increased in Newly Industrialized Countries (NICs).
Asia remained the main recipient of FDI in NICs/Low Income Countries (LICs).
FDI slowed down in Africa, Latin America and the Caribbean.
Europe became the world’s largest investing region.
Example: FDI in Cuba is expected to rise due to reestablished ties with the USA.
Transnational companies (TNCs)
TNCs are organizations operating in many countries.
They provide advantages and disadvantages to their host countries.
They hold great economic power and employ over 50 million people worldwide.
TNCs must adapt to economic conditions by using strategies such as rationalization, reorganization, and diversification.
Example: Tata Group, a TNC, operates in over 80 countries and employed about 600,000 people in 2015. It diversified into various industries including software, steel, hotels, and beverages.
Liberalization & globalization
Economic liberalization allows companies like Tata to compete internationally but also exposes them to competition.
The company responded by streamlining operations and focusing on key industries.
Example: Tata Steel doubled its output while cutting its workforce. The company also embraced globalization by acquiring foreign companies.
Unlock the Full Content!
Dive deeper and gain exclusive access to premium files of Geography HL. Subscribe now and get closer to that 45 🌟