FDI (Foreign Direct Investments) determinants in Greece and the impact Dissertation

FDI (Foreign Direct Investments) determinants in Greece and the impact of thr single European currency on the attraction of FDI - Dissertation Example The typical factors that bring FDIs in Greece mostly influence the capital productivity, decisions of foreign investors, and the labour costs on the sectoral level. In the conclusion, the paper provides significant policy implications. Table of Contents Table of Contents 2 1. Introduction 3 2. Literature Review 6 3. Locational Determinants of FDI INWARDS in Greece 10 4. Description of variables and hypotheses 15 6. CONCLUSIONS AND POLICY IMPLICATIONS 26 References 29 1. Introduction FDI is considered as the most important economic force in the world. The proportion of FDI in services sector is rapidly attaining great importance (United Nations Conference on Trade and Development, 2004). Special attributes making the treatment of FDI unique in the service sector include the coherence between the products’ production and consumption, the urgent requirement for local adaptation and the significant impact of quality (Boddewyn et al., 1986; Dunning, 1989). The services play a cruci al role in the entire process of production. For instance, the presence of the framework (Ramamurti and Doh, 2004) or financial services are regarded as the economy’s backbone. However, the small share of the services in the world’s exports, which is only 20 percent (IMF, 2003) highlights their non-tradable nature. Due to this specific attribute and in order to remove the trading restrictions, several businesses decide to support the domestic market with the FDIs. In services, the FDI inward stock of the world has increased from USD 950 billion to more than USD 4 trillion whilst the previous decade. At present, the FDI inward stocks in services account to over 60 percent of the total inward FDI stocks around the globe. Thus, in order to support their group internationally, numerous Multi-National Enterprises (MNEs) opt to invest in trading, marketing and financial intermediation associates. This shift of FDI flows to services is explained through the case of Greece in this study since Greece has been conventionally receiving FDI from the early 1950s. Most of the FDI flows were directed towards the sectors of basic metals, chemicals and transportation during the decade of 1963 to 1973 which extensively supported the revival and enhancement of the industrial base of the country. However, after the induction of Greece to European Union (EU), a smooth change occurred in the structure of FDI in the early 1980s. On the other hand, during the 1980s and 1990s, the FDI flows were targeted towards the industries of food, textiles, beverages and consumer electronics. The governments of Greece during that period took significant measures to lead the Greece towards rapid and sustainable development through enhancing the competitive advantages of its economy as it converged with the core countries of EU. These measures were further reinforced through targeted EU policies that specifically included Community Structural Funds and Cohesion Funds. The major part o f this support was inclined towards the development of infrastructure where as just a small portion of it was dedicated to education, training and capital (Paliginis, 2001). Presently, the objective of the policies at Greece is to encourage and attract FDI. Most of the industries in Greece are open to international investors, with the telecommunications sector being de-regularized as well as the energy industry being

National Express rejects takeover bid from First Group (Financial Research Proposal

National Express rejects takeover bid from First Group (Financial Times, 29 June 2009) - Research Proposal Example 1.2 billion pounds to banks (Gill, 2009, p 1). The United Kingdom government has also complicated National Express financial woes by the government refusal to renegotiate the conditions for its East Coast rail franchise with the transport business. The hard-line position adopted by the government is attributed to East Coast rail franchise being the most lucrative in the United Kingdom serving the United Kingdom commercial hubs such as Edinburg and London. Besides, citing the government role in its financial crisis, National Express board also cited its quest to solve the ?1.2 billion debt as its first priority before reconsidering the bailout from FirstGroup limited. In, addition, National Express board viewed FirstGroup as their rival in the transport business and thus postulated a sellout of the company to FirstGroup as surrender to a business enemy. National Express boards were thus eager to retain the legacy of their company’s in the transport industry (Miller, 2011, p 85) . Despite, the rejection of FirstGroup offer, acquisition and acquisition provide the best bailout opportunity and option to rescue National Express from the current financial hardships. This research thus draws on the case sturdy of National Express and FirstGroup to rationalize on the best solution to solve a corporate organization financial solution. This involves an analogy acquisition and acquisition as a financial solution with other financial crisis solution mechanisms recommended in fiance and accounting. The research establishes higher financial crisis solution rationality from acquisition and acquisition formulated financial solution compared to other possible and readily available financial and accounting options. Literature Review An acquisition mimics government bailout to corporations during financial crisis. The similarity between acquisitions and acquisition is evident in the supply of a large amount of money to the corporation under financial crisis, which is subseq uently used to pay its bankruptcy threatening debts. These facts are manifest in the proposed acquisition between National Express and FirstGroup, whereby Nation Express was offered a large sum of money by FirstGroup to pay its 1.2 billion debts. The ?1.2 billion proposed buyout of National Express is comparative to the government’s financial bailout to financial corporation during the 2007-2008 global financial crises (Milmo, 2009, p 1). In United States, the government acquisition styled bailout totaled $13.9 trillion leading the government bailout to be considered as more of an acquisition buyout of the financial stricken institutions than a rescue bailout package (Birdsall & Fukuyama, 2011, p 31). Acquisitions and acquisition of financial stricken corporations is also licked to the nationalization of finically poor performing or financially endangered businesses by the government (Finkelstein & Cooper, 2010, p 116). The same financial crisis incident illustrates the role of nationalization which mimics acquisition and acquisitions in the rescue of financial institutions from bankruptcy during economic downturns. A typical example of this financial rescue strategy is illustrated by the nationalization of the Northern Rock Bank in the United Kingdom at the verge of its bankruptcy during the financial crises. The Northern Rock Bank case also illustrates the irrationality of the hard-line position by a corporation board or the corporate organization stakeholders,