Write a 1,400-word analysis in which you compare two major trade theories with two major theories of foreign direct investment (FDI) and include the following:
Select one theory from each category and discuss how it has affected the patterns as well as the benefits associated with cross-border trade and investment activities.
Discuss the factors that would necessitate the need for nations to engage in Countertrade.
Explain the pros and cons associated with Countertrade.
Cite a minimum of 3 peer-reviewed references from the University Library.
Format assignment consistent with APA guidelines.
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Sample Answer:
…..Foreign direct investment (FDI) refers to business approach whereby firms have control of factors of production of business enterprise in a foreign country. The idea of FDI grows as a result of advanced telecommunication that allows real-time transfer of information……
……Morgan & Katsikeas (1997) define internalization theory as a model that based on the “notion that firms aspire to develop their own internal markets whenever transactions can be….
…..Countertrade can be influenced by avoiding government mandate, reduce risk exposure to exchange rates, and repatriate profits. As mentioned earlier, when government creates law that made it difficult to trade beyond a certain threshold established by the government. Essentially, the use of countertrading can reduce exposure to interest rates because the money one would….