pls-(a)-In the examples foreign direct investment i.e American Ford Motor Company and foreign Instituntional investors like mutual funds, which investors will stay longer in the country they are investing in? Give reasons. (b) - which one will give employment to the people in the country?foreign Direct investment or Foreign institutional investment? (c) - what are the advantages and disadvantages of foreign institutional investors?
(a) The FDI investors like the Ford Motor Company will stay longer in the country they are investing in than Foreign Institutional Investors. This is because FDI is in the form of factories and other form of tangible assets like machinery. Once that investment is made, it is difficult to withdraw from it quickly. On the other hand, FII is investment in financial assets which can be quickly sold off.
(b) FDI will provide more direct employment to the people of the country in which the investment is being made.
(c) Advantages of FII is that it can bring capital into the country at a fairly rapid rate. Domestic industries can benefit from that capital through greater investment. It also leads to more employment.
Disadvantage of FII is that the investment can be quickly withdrawn which can lead to a sudden crash in the economy of the country in which the investment is being made.
(b) FDI will provide more direct employment to the people of the country in which the investment is being made.
(c) Advantages of FII is that it can bring capital into the country at a fairly rapid rate. Domestic industries can benefit from that capital through greater investment. It also leads to more employment.
Disadvantage of FII is that the investment can be quickly withdrawn which can lead to a sudden crash in the economy of the country in which the investment is being made.