Many of the countries are focused towards attracting foreign direct investment due to the fact that they believe that use of FDI would provide those benefits in terms of domestic firms. Moreover, foreign direct investment is also considered as the important source of technology particularly for the developing economies. It is noticed that Blonigen et al (2007) regarded FDI as the key engine for economic growth and prosperity because it contributes more to the growth in comparison to the domestic investment. Therefore, based on this, it is evaluated that foreign direct investment is the important concept that must be considered by the economies in order to promote their growth and
For one the employment opportunities are methods through which the people in the host countries is seized, can create personal wealth. The improved roads, schools and hospitals are also one of the most direct benefits that the host country realises. Urban areas are able to grow, and this is an effect that improves the standard of living of the host country and the people in these countries. As Multi-National Companies enter different foreign markets, they are able to widen the international and domestic markets. This is a benefit that can be seen from the onset.
Bosch company's objective is to establish a better product which can improve quality of production in manufacture industry and provide a better quality of life which are beneficial and innovative to consumers. It's entrepreneurial freedom and financial independence allow Bosch company to pursue it's vision. Bosch company focus on it's core competencies in automotive and industrial technologies as in products and customers services
Everyone need strong and sturdy protection for their creations as not only they can enjoy the benefits of their labours but their creations can also help in bringing the world to a new level. Intellectual property can also be translated directly as monetary gain. In the economy, what makes a business success depends on the innovation
There are a number of theoretical studies that have examined FDI. According to economists, FDI is an essential component for the economic development of any country, specifically developing countries. The theories of FDI are as follows: 1. Production Cycle Theory of Vernon According to the theory of Venom, there are four stages of production cycle: innovation, growth, maturity and decline. According to Raymond Vernon, different companies come up with a new innovative product or service for local consumption and export the surplus in order to serve also the foreign markets.
The rationale lies in the belief of many economists, that trade is the engine of growth, in the sense that it can contribute to a more efficient allocation of resources within countries as well as transmit growth across countries and regions. Exports, and export policies in particular, are regarded as crucial growth stimulators. Exporting is an efficient means of introducing new technologies, both to the exporting firms in particular and to the rest of the economy, and exports are a channel for learning and technological advancement. Moreover, the growth of exports plays a major part in the growth p process by stimulating demand and encouraging savings and capital accumulation, and, because exports increase the supply potential of the economy
Bharat Forge witnessed huge success through export driven domestic growth by changing the work force from muscle power to brain power. The main aim was to acquire technological expertise and another main success strategy was speed to market, high quality, volume, low cost and customer centric or customers focus. Global strategy mainly focused on expanding the company’s product range and develop closer client partnership and to ensure more efficient client logistics. Overseas acquisitions were carried out to get new clients also resulting in manufacturing at different places at the world which improved supply logistics. Bharat Forge invested in new workshops with state of art automated press line which lowered manufacturing variable cost and this automated press line increased the life of dies.
Gupta, 2012) The authors concentrated on valuing high-growth service firms and test whether investor use customers metrics by the firm’s valuation. They shared the finding of that instead of the inaccurate information from the traditional valuation method investor could value the customers as intangible assets to more precisely estimate the value of the firm. Customer metrics in this work are the new customers, customer service costs and customer acquisition cost. The authors highlight the importance of the customer acquisition costs in increasing firm’s customer base. This implies that sometimes higher current spending can be a good sign for medium and long-term
While services sectors can substantially add to productivity growth of manufacturing, manufacturing can also add to growth of services by providing additional domestic demand for them. Thus, building strong domestic value chains within the economy is needed to be able to gainfully link into global value chains. Incentivizing domestic firms to procure domestically in order to develop their domestic input industry can boost global competitiveness of many manufacturing
The interactive nature of clusters stimulates innovation and economic learning. Clusters stimulate regional competitiveness in three ways: • by increasing business productivity • by boosting their innovation capacity, which underpins future productivity gains • by stimulating the formation of new businesses, which expand and strengthen the cluster Firms that are part of a cluster are expected to operate more efficiently when sourcing inputs; accessing information, technology and institutions; coordinating with related firms; and measuring their performance against other firms so as to improve. Clusters embrace much more than a traditional supply chain or an industry; they also includes academic institutions providing training, research and consulting services Cluster Policies The purpose of cluster policies is broadly to strengthen a particular regional economy, and thus the national economy. However the purpose of the different policy instruments will vary depending on the type of cluster and regional