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Provide three examples of policy instruments that governments can use to influence FDI.
Does his analysis provide sufficient evidence to answer the question of whether the world
should adopt a standard methodology for measuring and reporting FDI? Include an
analysis of the benefits and costs (the downside) of FDI. Provide specific supporting
The main concern that Kerner (2014) raises in the assessment and testing of the use of the
Foreign Direct Investment (FDI) data as a measure of the political science theories influencing
the process, there is always a tendency of the theorized phenomena introducing bias. In turn, the
bias introduced by the phenomena ends up complicating the hypothesis testing undermining its
authenticity. The measure of the FDI as the "right measure" towards the political science theories
influencing the International trade requires the players to reach a certain level of objectivity to
cover a broad range of empirically and conceptually distinct phenomena in which the politics
take the main course to determine the level of FDI directed towards the nation states.
The Policy Instruments (PIs) that governments use to influence FDI are strictly attributed
to the comprehensive national agenda to promote and create more awareness of the current
opportunities I the country for the FDI to take advantage of impacting to increase economic
M3D1: INTERNATIONAL TRADE AND POLITICAL INFLUENCES 2
development. The main PIs is categorized into four significant areas including strategy and
The strategy and organization entail the development of the national policy context to
guide and manage the FDIs, which involves the inter-ministerial co-operation, setting and
promotion. In turn, create a competitive position among other nations aiming for the same FDIs
(Bartels, 2009). The lead generation puts in place measures to market the country and create
more awareness among the investors on the existing opportunities that they can utilize. The
facilitation PI entails the government engagement with potential investors, companies, and
fanciers to illustrate the mechanism laid down to enhance their operations in improving the FDIs.
Lastly, the investments services as a PI entails the government defining the opportunities in the
country that the investors ought to sup and commit their funds for substantial profits in the
future. The combination of the PIs provides an effective playground where FDIs can be
standard method for measuring and reporting FDI. Kerner (2014) concludes by asserting the
"political science theories about FDI speak to such a broad range of empirically and conceptually
distinct phenomena that conflating them as FDI' does a disservice to the complexity of the
topic (Kerner, 2014). In short, he fails to find a standard methodology for measuring and
reporting the FDI across the world in respective countries and the political structures, theories,
and influences in distinct places differ significantly. This asserts that the political science
theories as the primary aspect of measuring the FDI vary from one region to another. Thus, it
M3D1: INTERNATIONAL TRADE AND POLITICAL INFLUENCES 3
lacks a common basis of operation, hence, introducing the bias that complicates the hypothesis
References
Bartels, F. L., & De Crombrugghe, S. A. (2009). FDI policy instruments: advantages and
Kerner, A. (2014). What We Talk About When We Talk About Foreign Direct Investment.