Research problem
Globalization and international cross-investment are the recent and defining features of economic life. All aspects of corporate activity, from R&D and product development to production and marketing, must be oriented to and increasingly take place in major markets throughout the globe. Globalization is occurring through a variety of mechanisms, but none is more important than international investment, which has risen to all-time highs over the past decade (Canto & Laffer 2002). International investment stands ever more clearly as a key determinant of domestic productivity and of economic success in the global economy. The inflows bring jobs as well as new technologies and management practices to the host country. The outflows enable companies to open markets abroad, generating exports in the form of intra firm trade. The issue at stake in the debate over international investment should be the ability of an economy to attract it. The policy toward international investment has generally been based on adherence to the principle of equal treatment for all investors, which ensures that all firms are treated equally regardless of nationality of ownership. This principle means that foreign investors are treated the same as domestic investors under local laws. Equal treatment strengthens the economy by ensuring a stable international investment system, attracting foreign capital and, in theory, helping to protect investments in other countries. The practice of conferring most-favored nation treatment has also meant that a foreign-owned company receives treatment no less favorable than that accorded any other foreign-owned companies (Beltz 2001). This paper is a proposal to analyze how international investments contribute to solving budget deficits of developing countries.
Aims and objectives
1. Analyze the concept of international investments
2. Understand the onset of budget deficits in developing countries.
3. Know how developing countries solve budget deficits.
4. Determine the cause of budget deficits.
5. Analyze how international investments assist in solving budget deficits of developing countries.
Literature review
A new view on investment has emerged in the past decade, largely in response to new trends. The classic view of international investment and of the multinational corporation is that the principal motive for international investment is the desire of multinational firms to secure the least costly production of goods for sale in world markets (Glickman & Woodward 2003). Multinational corporations strategically arrange their activities according to an international division of labor, with high-level administration, finance, and technology development, for examples, occurring in central, core locations and more standard production and labor located in lower-wage, peripheral locations. International investment reflects a particular type of firm-specific asset, referred to as an internalization advantage. International investments result when a firm has advantages such as technology or products that it can exploit in global markets; overseas investment offers a cost-effective mechanism for exploiting such advantages, as for example if offshore production offers greater returns than technology licensing; or overseas factor conditions are favorable. The conventional theory suggests that international investment is driven by firms seeking to exploit advantages that come from economies of scale or superior technology to preserve or increase market share and reduce costs of production. The new focus on international investment turns attention to the relationship between the globalization of production, international investment, and domestic productivity growth. It suggests that international investment is often the source of technology transfer, new management practices, and knowledge that leads to productivity improvements, employment growth, and increasing wealth for the host nation. This role should not be minimized (Graham 2000).
Methodology
Sample collection
To determine the number of respondents that will be asked to participate and give information regarding the study convenience sampling will be used. Convenience sampling means to collect or interview individuals who actually experience the phenomenon. Convenience sampling will focus on individuals that experienced diabetes mellitus or has someone in the family that experienced such disease.
Methodology/Data Collection
Surveys will the primary method of data collection. Internet surveys would be used. Internet surveys have been both hyped for their capabilities and criticized for the security issues it brings. Internet surveys require less finances since there would be no printing of paper and there would be no need to travel just to gather data. Internet surveys would also require less time for the researchers and the respondents.
Data Analysis
In analyzing the collected data, the paper will be divided into the demographic profiles of the respondents and the ideas of respondents. The data that will be acquired will be put into graphs and tables.
References
Beltz, CA (ed.) 2001, The foreign investment debate: Opening
markets abroad or closing markets at home?, American Enterprise
Institute, Washington, DC.
Canto, VA & Laffer, AB (eds.) 2002, Monetary policy, Taxation
and international investment strategy, Quorum Books, New York.
Glickman, NJ & Woodward, DP 2003, The new competitors: How
foreign investors are changing the economy, Basic Books, New
York.
Graham, EM 2000, Fighting the wrong enemy: Anti-global
activities and multinational enterprises, Institute for
International Economics, Washington, DC.
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