...Introduction of Foreign Direct Investment Foreign Direct Investment (FDI) is known as the long term participation by country A into country B. It usually involves participation in management, joint-venture, transfer of technology and expertise. In other words, foreign direct investment is the cross-border corporate governance mechanism through which a company gains productive assets in another country. FDI is different from other major forms of foreign investment in that it is motivated largely by the long-term profit prospects in production activities that investor directly control (Wong, 2005). Wong also says that almost most of the developing and least developed countries worldwide equally participated in the process of direct investment activities. Over a long period of time, foreign direct investment (FDI) forms a major part of investment in most industrial and some developing countries. Besides that, he did explain that some FDI is intended to utilize local natural resources. Sometimes it is to employ relatively cheap labour, and sometimes to produce goods near to markets. Moreover, foreign direct investment can be a significant driver of development in poor nations. According to Katerina, John and Athanasios (2004), it provides an inflow of foreign capital and funds, in addition to an increase in the transfer of skills, technology, and job opportunities. Furthermore, they said it would be difficult to generate this capital through domestic savings, and even if it were...
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...Proposal for Effects of Foreign Direct Investment towards Economic Growth, Exchange Rate, and Management Skills in Malaysia Research Method (MKT651) Noor Azyan Syawanie Bt Abdul Ghani Nur Athirah Binti Mohamadzin Nur Aishatul Adila Binti Adnan Effects of Foreign Direct Investment towards Economic Growth in Malaysia Introduction Malaysia is a nation that has been working itself up from the predominantly mining and agricultural based economy towards a more multi-sector economy. To achieve a faster economic growth, Malaysia has accepted an unparalleled opportunities for developing this country through globalization (Athukorala, 2003). An offer of combination of locational advantages by the government is a factor that foreign investors got tempted with (Farhad, Alberto, & Ali, 1999), to invest in Malaysia. Foreign investors has been encouraged by the Government to invests in Malaysia in which has the advantage of having a well-developed infrastructure, industrious workforce, as well as politically stable nation with a good legal system with the additional attractiveness of incentives for the foreign investors. In other words, foreign investors are attracted to invest in Malaysia because of the lower cost of production (Wong, 2005). FDI is a medium for acquiring skills, technology, organizational and managerial practices and access to market, besides being the source of finance and employment (Farhad, Alberto, & Ali, 1999). There are a lists of exports by...
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...Foreign direct investment (FDI) occurs when a firm invests funds in business activities out of its country of origin. In order for a firm to become involved in FDI, three conditions of Dunning’s Eclectic Theory (1993); (1) ownership, that is a company possessing an advantage which gives them a competitive edge in the international market as compared to its domestic market, (2) location, where the country a company intends to invest in must have the right pull factors which will be in favour of the investing company, and (3) internalisation, that is transferring the company’s ownership advantage is more beneficial than selling it off, must be satisfied. Emerging countries focus and rely heavily on FDI as it is a vital element which assists in boosting the country’s development and economic growth. Like other developing countries, Malaysia too depended on FDI and benefitted greatly from the strong inflow (Shahrudin, Yusof, & Satar, 2010) and transformed from an agriculture-based economy to an industrial economy (Wong, 2005). Despite being an attractive FDI destination, as well as an eminent host country to foreign investors, Malaysia has seen an 11% decline in FDI inflow (U.N. Conference on Trade and Development, 2015). A country’s rise or fall in FDI is affected by several determinants such as the market factor, trade barriers, costs, and investment climate (Hill, Cronk, & Wickramasekera, 2014). This essay will serve to discuss both domestic and global factors influencing...
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...ISBN 1947-833X Proceedings of 1st Global Business Summit Conference (GBSC 2009), Kelantan, Malaysia University of Technology Mara Malaysia, Shah Alam, 15-17 June 2009, Volume 2, pp. 128-137 Entry Mode Strategies of Malaysian Service Firms: A Resource-Based Approach Mohammadreza Asgari*, Mohd Nazari Ismail**, Syed Zamberi Ahmad*** Faculty of Business and Accountancy, University of Malaya, Kuala Lumpur ABSTRACT The rapid progress in services has attracted scholars to study the behaviour and decisions of service firms. Firms from Malaysia, as a developing country, with a fast growing economy that increasingly relies on services have shown a remarkable expansion into foreign markets, which has resulted in high foreign direct investment (FDI) outward inflows and increasing exports of services. This paper utilizes the resource-based theory, in which the main determinants of the choice of entry mode are organizational variables compared to environmental factors, to explain the choice of entry strategies made by Malaysian service firms and the motives for it. This study aims to develop a framework for the choice of entry mode strategies that has fewer shortages than others, analyze the determinants of entry mode strategy in order to find the similarities and differences existing between firms in the decision-making process for the choice of entry mode, and consider the role of psychic distance in adopting an appropriate strategy in different markets. Suggestions for future research...
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...Workshop Paper Foreign Investment and the Sustainability of Malaysian Bumiputera (Indigenous) Technology-Based Firms Umar Haiyat Abdul Kohar School of Management, RMIT University, Melbourne, Australia Email: umarhaiyat.abdulkohar@rmit.edu.au Associate Professor Adela McMurray School of Management, RMIT University, Melbourne, Australia Email: adela.mcmurray@rmit.edu.au Dr. Konrad Peszynski School of Business Information Technology, RMIT University, Melbourne, Australia Email: konrad.peszynski@rmit.edu.au 1 Foreign Investment and the Sustainability of Malaysian Bumiputera Technology-Based Firms ABSTRACT In the new global economy, the importance of inward foreign investment towards a country’s economic growth has become a central issue, especially amongst developing countries. Nevertheless, there is a paucity of literature addressing the implications of foreign investment towards the sustainability of business amongst Malaysian Bumiputera (Indigenous) new technology-based firms (NTBFs). Utilizing Weick’s (1989) conceptual theory building approach, this study provides a foundation for conceptualizing the implications of foreign investment in Malaysian Bumiputera new technology-based firms. Through systematic documentary analysis of the development of foreign investment activities in Malaysia prior to independence (1957) until 2009, our consolidated findings yield a conceptual model showing the implications of foreign investment to the sustainability ...
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...The current issue and full text archive of this journal is available at www.emeraldinsight.com/0268-6902.htm MAJ 23,4 The impact of government and foreign affiliate influence on corporate social reporting The case of Malaysia Azlan Amran School of Management, University Science Malaysia, Penang, Malaysia, and 386 S. Susela Devi Faculty of Business and Accountancy, University of Malaya, Kuala Lumpur, Malaysia Abstract Purpose – This paper seeks to investigate the influence of government and foreign affiliates, particularly; multinational companies on corporate social reporting (CSR) development in an economy, where CSR awareness is low coupled with weak pressure group activism. Design/methodology/approach – This is a cross sectional study that focuses on the information contained in the annual reports for year 2002/2003. This research uses content analysis as method to measure the extent CSR. Findings – Based on regression analysis, the study evidences on the impact of government influence. However, the impact of foreign affiliation variables is not evident. Institutionalisation of the government’s aspirations and commitment to CSR is perhaps the most appropriate description for Malaysian CSR practice. Research limitations/implications – There are two main limitations of this study. Firstly, this study examines the annual reports for one year. Secondly, this study is annual reports centric. It does not examine any other stand alone reports that the respondents might...
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...QUESTION 1 Explain why the study of macroeconomics is important in making business decisions. Macroeconomics is the study of the economy as a whole. It is the study of the aggregate demand and aggregate supply which reflect the demand and supply of everybody in the whole country. It examines the activities and trends in economy’s wide phenomena, such as unemployment, inflation, economic growth, money supply, budget deficits, and exchange rates. The knowledge from this study will indicate the ‘health’ condition of economy in the country. As a business owner, the study of the macroeconomics is very important to make everyday business decisions as they have to focus beyond what is happening in the firm and look into aggregate demand and aggregate supply in economy. Managers always need information or knowledge to make decisions. Example is demand theory. If people get low income, they tend to spend less than when they are getting higher income. As the managers are forecasting the demand for their products and services, anticipation of how consumers’ incomes will grow should be learned. To make decisions, business owner should also know about the current interest rates for loans if they are about to borrow money from the financial institution. They should also be aware about where they stand in the business cycle. Cost of labour is another important reason to study of macroeconomic in order to make better decision. For example, during tight labour supply, the price or...
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...Economic growth is sought after by every country because it promises to build and strengthen a country’s foundation in several ways. Primarily, it seeks to reduce poverty which means to improve the people’s access to basic amenities. Governments will be able to expend on public goods like healthcare, education and infrastructure because of the added tax revenues earned from higher income earners. This consequently leads to improved standards of living for all classes of people. Economic growth also injects investments into the economy as savings become capital for business ventures. It brings twin benefits by boosting productivity and raising income levels for those working in the industrial and service sectors. Thus, an increase in gross domestic product (GDP) is not the only determinant of economic development. It is directly correlated with human welfare factors. Hence, the economic growth models that we study examine the varying degrees of this correlation across different economies and highlight the underlying importance of savings. Out of the three emerging countries given, I have chosen Malaysia to discuss in my essay. Malaysia is a steadily developing economy that has been constantly growing since 2001 as can be seen from the chart below. And it has experienced a 7.2% real GDP growth rate in 2010, highest so far since the 8.6% growth in 2000. Chart 1: GDP Real Growth Rate Chart by Year (Source: http://www.indexmundi.com/g/g.aspx?c=my&v=66) As identified by the...
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...petroleum industry capitals respectively, are the top real estate investment destinations, and account for as high as 65 percent of all activities in this asset class, a report by the National Bureau of Statistics has revealed. The report indicated that Lagos has the greatest amount of real estate activities at 37 percent, followed by Abuja with 22 percent and Port Harcourt (Rivers State) with 6 percent, all covering 65 percent of real estate activities in the country. The trio, often regarded as Nigeria’s traditional cities, have seen increased tempo of activity in real estate development and much of the investments that have gone into real estate in the country in the last decade were concentrated in these cities. Nigeria’s has a burgeoning real estate sector, which by the GDP rebasing exercise in the country in April 2014, was discovered to be the fastest growing and sixth largest sector in the Nigerian economy, explaining the rising level of investment in the sector by both local and foreign investors. Foreign direct investment (FDI) is defined as “an investment in which a firm acquires a substantial controlling interest in a foreign firm (above 10 percent share) or sets up a subsidiary in a foreign country” (Chen, 2000). The International Monetary Fund adds “the investor’s purpose is to have an effective voice in the management of the enterprise”. FDI is not only a financial transaction between two foreign enterprises, in which one company invests in the capital of the other...
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...Unit 1 McDonald’s is the world’s largest fast food chain that is originated in California, USA. Ray Kroc became a franchisee of the McDonald brothers (Dick and Mac) and began opening new restaurants, buying all the rights to the McDonald's concept in 1961 for $2.7 million. McDonald’s Corporation give the franchise to Golden Arches Restaurant Sdn Bhd to operate McDonald’s restaurants in Malaysia and the first outlet was opened in April 1982 at Jalan Bukit Bintang, Kuala Lumpur. McDonalds mission is “To be our customers' favourite place and way to eat” and their vision is to be the world's best quick service restaurant experience. Being the best means providing outstanding quality, service, cleanliness, and value, so that we make every customer in every restaurant smile. The operations in McDonald’s Malaysia are affected with the government regulation on the regulation of fast food operation. As a certified fast food operator, there are many regulations and procedures that McDonalds should follow. For example is the Halal certification that becomes a concern to Muslim consumers. McDonalds protect its integrity and consumer confidence by ensuring all materials and process are as claimed or must followed. The economic condition and growth of the country also is an important indicator to the demand of products that McDonalds offered. As the food priced slightly above normal foods, not many people will have the income range to consume the products. McDonalds faced government...
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...The Influence of Organizational and Human Resource Management Strategies on Performance by Raduan Che Rose, PhD, and Naresh Kumar, PhD T oday a firm’s success largely depends on the capabilities of its members. Firms may have the capital and technology, but it is Human Resources (HR) that will help firms face the challenges of business globalization. Capital can be generated. So can technology. But the HR required to propel an organization through the coming challenges must be rightly and appropriately encouraged and motivated. Significantly, these days careful management of this important resource calls for a strategic focus on Human Resource Management (HRM) in the organization. Previous research on HRM widely accepted that employees create an important source of competitive advantage for firms (Barney, 1991; Pfeffer 1994). As a result, it is important that a firm adopt HRM practices that make best use of its employees. This trend has led to increased interest in the impact of HRM on organizational performance, and a number of studies have found a positive relationship between so-called “high-performance work practices” (Huselid, 1995) and different measures of company performance. Furthermore, there is some empirical support for the hypothesis that firms, which align their HRM practices with their business strategy, will achieve superior outcomes (Bae & Lawler, 1999). However, a review of the literature indicates a serious lack of large-sample empirical studies designed...
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...mentioned that, “ Malaysia is among the top three contenders for offshoring business in the world according to the 2004 Offshore Location Attractiveness Index compiled by the global management consulting firm A.T. Kearney, sources were quoted. Malaysia is ranked 3rd behind India (1st) and China (2nd) but ahead of Singapore (5th), Philippines (6th) and Thailand (13th). In its report, A.T. Kearney considers Malaysia a “ natural choice” for offshore services in view of its low costs, particularly for infrastructure, the most attractive business environment among emerging markets, strong global exposure of the workforce, and government support for the information and communications technology (ICT) sector. Other significant initiatives cited by A.T. Kearney include the government’s investments in infrastructure and developing the intelligent cities of Cyberjaya and Putrajaya as part of the Multimedia Super Corridor project. Thus, numerous companies –...
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...Revised and Final Draft January 2015 Not to be quoted Strategy for Export Diversification 2015-2020 Breaking into new markets with new products Dr. Zaidi Sattar Policy Research Institute of Bangladesh Prepared as a Background paper for the Seventh Five Year Plan 1 Table of Contents List of Tables .............................................................................................................................ii List of Figures ...........................................................................................................................ii List of Boxes .............................................................................................................................iii Acronyms .................................................................................................................................. iv I. INTRODUCTION ................................................................................................................ 1 II. CHALLENGE OF EXPORT DIVERSIFICATION ....................................................... 1 III. EXPORT PERFORMANCE AND PROGRESS OR LACK IN DIVERSIFICATION .................................................................................................... 3 Exploiting Non-traditional Markets for Exports ............................................................................... 14 IV. INTERNATIONAL EXPERIENCE AND LESSONS LEARNT ............................... 18 V. CONSTRAINTS TO EXPORT DIVERSIFICATION...
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...Foreign direct investment And Economic Growth in Bangladesh Internship program at Brac Bank Ltd. Internship Report On “Foreign direct investment And Economic Growth in Bangladesh and Internship program at Brac Bank Ltd.” The Internship report is submitted to the Department of Finance, University of Dhaka for the partial fulfillment of the requirement of BBA program. Submitted to: Department of Finance University of Dhaka Supervised by: Mohammad Jahangir Alam Chowdhury Professor Department of Finance University of Dhaka Submitted by: Zarin Tasnim ID: 17-009 Section: A Department of Finance University of Dhaka Signature of the Supervisor Date of Submission: 7th May, 2015 Letter of Transmittal 7th May, 2015 Mohammad Jahangir Alam Chowdhury Professor Department of Finance University of Dhaka Subject: Submission of Internship Report on Foreign direct investment and Economic Growth in Bangladesh. Dear Sir, It is an absolute pleasure for me to submit the Internship Report titled “Foreign direct investment and Economic Growth in Bangladesh” as a significant part of the BBA program. While making this report, I have experienced a fair knowledge about Foreign direct investment and economy of Bangladesh and its impact on the growth of Bangladesh. I have tried my best to follow your guidelines in every aspect of preparing this report. I have collected what I believed...
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...4/16/2015 4/16/2015 Westminster International College Cardiff Metropolitan International University Lecturer: Dr. Sayed Kadir Prepared by: Asadullah Escandari Student ID #: 0192VMNVMN1014 (MBA) Date of Submission: April 16, 2015 MBA-II Semester Assignment (Strategic Management) Westminster International College Cardiff Metropolitan International University Lecturer: Dr. Sayed Kadir Prepared by: Asadullah Escandari Student ID #: 0192VMNVMN1014 (MBA) Date of Submission: April 16, 2015 MBA-II Semester Assignment (Strategic Management) Strategic Analysis of Maxis An Extensive study of Maxis strategies Strategic Analysis of Maxis An Extensive study of Maxis strategies Contents Table of Figures 2 Executive Summary 2 1. Introduction – About Maxis 3 2. Task 1- 3 2.1. Company Profile 3 2.2. Strategic Alliance of Maxis 4 2.2.1. Select Partners of Maxis 4 2.2.2. Allies of maxis 4 2.3. Select Partners 5 2.3.1. System Integrators 5 2.3.2. Application Solution Providers 5 2.3.3. Content Providers 5 Allies of Maxis 5 Consulting Partners 5 Technological Partners 5 Hardware Partners 6 2.4. Maxis’ Authorized Distributors 6 2.5. Strategic Partners of Maxis 7 2.6. Alliances of Maxis: 8 2.7. Internationalization Model in Maxis 9 3. Task 2: 11 3.1. MISSION 11 3.2. VISION 11 3.3. VALUES 11 3.3.1. SIMPLE 11 3.3.2. TRUST 12 3.3.3. CREATIVE 12 3.3.4. BRAVE 12 ...
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