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Chapter 18 Foreign Direct Investment and International Capital Budgeting Objectives • To discuss the characteristics and development of FDI. • To outline the theories of FDI. • To describe the techniques of international capital budgeting. • To examine the implications of taxation, country risk and transfer prices for international capital budgeting. Copyright ª 2004 McGraw­Hill Australia Pty 2 Ltd PPTs t/a International Finance: An Analytical Definition • An investment project is classified as direct investment if the investor acquires ‘significant control’ over a firm. Copyright ª 2004 McGraw­Hill Australia Pty 3 Ltd PPTs t/a International Finance: An Analytical What is ‘Significant Control’ ? • Ownership of 10­25% • United States, Japan and Australia: 10% • France, Germany and United Kingdom: higher threshold • Belgium and the Netherlands: no specific number Copyright ª 2004 McGraw­Hill Australia Pty 4 Ltd PPTs t/a International Finance: An Analytical Reasons for Interest in FDI • Rapid growth and changing pattern of FDI • Concern about causes and consequences of foreign ownership • FDI channels resources to developing countries • The role played in transforming ex­ communist countries Copyright ª 2004 McGraw­Hill Australia Pty 5 Ltd PPTs t/a International Finance: An Analytical ... - tailieumienphi.vn
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