Foreign Direct Investment

The argument for FDI says that FDI brings capital, technology, develops skill and creases employment and incomes. This exercise is designed to have students become comfortable with the terms used when discussing FDI and gets them familiar with the glossary, and is intended to get the student to use the database to examine the argument on behalf of FDI.

1. Go to the page on Foreign Direct Investment
2. Read through the page and look up key terms, including economic globalization, purchasing power parity, and FDI.
3. Go to the database, and choose three countries that have a high positive net inflow in the 1960-1990 column. Explain what it means for a country to have a high positive net inflow.
4. Go to the database again.
5. Choose those indicators that you think relate to the elements listed in the argument for FDI (GDP per capita, electricity, manufactures as % of exports, labor in industry as % of total employment)
6. For each of the three countries, create a line graph that shows the choosen indicator and the country over a decade increment from 1960-1990.
7. From your results, do you agree with the argument for FDI?

Exercise 2: Use of maps to examine country/region specific changes in FDI

1. Go to FDI page and scroll over the maps.
2. Why is there such a dramatic shift in FDI in south-east Asia from 1990-2000? Which countries specifically stand out? -á (We need a map of the world that has all the countries labeled.)
3. Look at Africa compared to other continents when you scroll over the maps.
4. From the information on the FDI page, can you think of why FDI is so low in Africa compared to other regions of the world?