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Essay / Research Paper Abstract
4 pages in length. Foreign investment has become the lifeblood of globalized international commerce. The extent to which the influence of foreign investment improves social, political and economic standards is both grand and far-reaching; that nations across the world continue to experience advantageous results speaks the growing and inextricable relationship between global commerce and foreign investment, not the least of which includes the beneficial impact it continues to have upon the United States. Bibliography lists 4 sources.
Page Count:
4 pages (~225 words per page)
File: LM1_TLCFrnInvst.rtf
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nations across the world continue to experience advantageous results speaks the growing and inextricable relationship between global commerce and foreign investment, not the least of which includes the beneficial impact
it continues to have upon the United States. Most economists will indicate that the gains from trade do not come from an absolute
advantage; rather, they come from a comparative advantage which means that a nation might do well to concentrate on those aspects that it can do better and more cheaply than
its competitors. It is not only how much a given country spends for it but how well it accomplishes its task, as well. Moreover, labor costs are not
the only determining factor of foreign investment. According to a recent study, the number one factor that a company looks at when deciding where to locate is its closeness
to input suppliers and to the market that the company wishes to enter (Kliesen, 1993). Free trade promotes a reallocation of jobs, which invariably boosts the standard of living
for all concerned. The core issue is not normally the number of jobs created or lost; instead it is what the incentives are to promote or retard economic growth.
"To reap the full benefits of trade and investment...liberalization must be accompanied by a coherent set of growth-oriented macroeconomic and structural policies, capacity-building, adequate social policy and above all,
good governance" (Vandeberg, 1999, p. PG). Three primary reasons foreign investment is beneficial to the United States include the ability to supply jobs and lower unemployment rate for a number
of states; raise state revenues; and reinvest money back into the U.S. economy. For example, the Australia/United States Free Trade Agreement was established as a means by which two
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