Evaluate The Costs And Benefits To Modern Business From Engaging In Foreign Direct Investment

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Along with the constant deepening of modern international trade globalization, various economic elements of modern commerce such as: labor, goods, service and capital etc. have begun to span the geological border of each country and been widely circulated in the world under the promotion of the globalization. Especially the capital internationalization whose main form is international direct investment is the most frequent. The capital internationalization includes two dimensional contents: on one hand, it's an international of investor structure; on the other hand, it's also an international of enterprise organization structure, including the internationalization of enterprise headquarters, area headquarters, operation headquarters, …show more content…
However, some non-tariff trade protective measures such as the anti-dumping policy adopted by the import country promote the enterprise to adopt the international direct investment manner to get round these non-tariff barriers.

According to relevant data statistics, the direct investment flow of Japan on EU and U.S. in 1980s was affected by the increase of anti-dumping cases of the two countries, and the foreign direct investment flow increased accordingly. For example: from 1980 to 1995, U.S. has launched 791 anti-dumping litigations, the defendant companies in 126 litigations adopt the foreign direct investment evading the anti-dumping to invest in U.S., most adopt the new establishment mode, some enterprises adopted the manner of purchasing the local enterprise or extending the scale of original direct investment enterprise. The experience of other countries also proves that the strict trade protectionism threat as the anti-dumping of the import country will finally promote the direct investment and transfer the enterprise production of original export country into the direct investment production of original export country in the import country, and turn the so-called imported product into the product produced by the local enterprise of the import country. This is the so-called "replacing the trade with investment".

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