Page 63 - Demo

%u062c%u0645%u064a%u0639 %u0627%u0644%u062d%u0642%u0648%u0642 %u0645%u062d%u0641%u0648%u0638%u0629 %u0640 %u0627%u0625%u0644%u0639%u062a%u062f%u0627%u0621 %u0639%u0649%u0644 %u062d%u0642 %u0627%u0645%u0644%u0624%u0644%u0641 63 %u0628%u0627%u0644%u0646%u0633%u062e %u0623%u0648 %u0627%u0644%u0637%u0628%u0627%u0639%u0629 %u064a%u0639%u0631%u0636 %u0641%u0627%u0639%u0644%u0647 %u0644%u0644%u0645%u0633%u0627%u0626%u0644%u0629 %u0627%u0644%u0642%u0627%u0646%u0648%u0646%u064a%u0629What are the motives of international companies for foreign direct investment?International companies can achieve their goals of increasing shareholder wealth through the motives of increasing revenue or reducing costs26.Revenue-Related Motives1. Attract new demand sources, particularly when growth opportunities are limited in the home country.2. Break into profitable markets.3. Leverage monopolistic advantages, especially for companies with unique resources or skills that competitors lack.4. Adapt to trade restrictions.Cost-Related Motives1. Fully leverage economies of scale, particularly for companies that rely heavily on machinery.2. Utilize cheaper foreign factors of production.3. Use foreign raw materials, especially if the multinational corporation (MNC) intends to sell the finished product back to consumers in that country.4. Use foreign technology.5. Respond to exchange rate fluctuations, especially when foreign currencies appear undervalued.6. Direct Foreign Investment (DFI) can also help reduce a multinational corporation's exposure to exchange rate risks.7. Diversify sales and production internationally.Before investing abroad, the potential benefits must be weighed against the costs and risks. As conditions change over time,some countries may become more attractive for DFI, while others may become less appealing. The best way for a firm to enter a foreign market depends partly on the characteristics of that market. For example, if consumers prefer buying domestic products, licensing or joint ventures might be better options.26 --Eun, C. S., & Resnick, B. G. (2012). International financial, edition Six, McGraw Hill.