Why do companies decide to invest overseas and to go multinational Assignment

Why do companies decide to cast overseas and to go multinational - Assignment ExampleJepson (2002) explains the unprecedented flow of foreign direct investments during the final two decades has made spectacular contributions to the economic restoration of Europe and to the industrialization of many of the developing countries. Spectacular, too, fill been the returns realized by the international corporations that undertook the investments. However, if we examine the conditions a host country must satisfy if it is to play along attracting foreign investments, quite distinct limits to a countrys ability to keep its doors open to the foreign investor become apparent. A few basic facts will make the point. (McLaughlin Mitchell 2006).Barry (2002) defines that the most fundamental fact is this A countrys capacity to fellate foreign direct capital inflows is ultimately limited by its ability to service that capital, in wrong of flow account debits (e.g., dividends) and eventual repat riation of principal. In turn, a countrys ability to service the stock of foreign-owned capital is laced to its ability to generate sufficiently large payments surpluses on other current account items. (Relying on a positive balance in the capital accounts is just putting off the day of reckoning.) These relationships are manifestly more easily stated in the aggregate than conclusively sorted out in detail. The current account of a countrys balance of payments has many components, and foreign-exchange availabilities come from many sources.