Unit 2 Mini Case

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Unit 2 Mini Case

Foreign Direct Investments are being attracted by the Philippine Government into
the country for decades. It has contributed to the growth of the country’s
economy for some time. With foreign investments coming into the country, is it
correct to say that they are ALWAYS a serious threat to local investors doing a
trade?

Foreign direct investment can support the economic development of a country by


creating a more conducive environment for a range of businesses and other
investors increasing its total factor productivity and efficiency of resource use. They
contribute to more jobs being offered and introduce new technologies that introduce the
locals to new trends and know-how. With these factors, local investors are threatened in
doing business in their own country. For local investors that are trying to move up in the
business world, having lots of foreign investors will be hard for a barely surviving
business. Having foreign investors can disrupt these local industries and economies by
attracting the best workers and creating income disparity. It will be hard for the local
investors to find businesses to invest in when their competitors are foreign investors
who could give something new to the table and to whom these businesses could be
biased. On the other hand, having foreign investors could be a challenge and not a
threat to the local investors. The latter should see them as a challenge to their business,
for them to improve their techniques and ways of doing business.

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