GP - Push factors of outward FDI

Question 1

how is the correlation between a countries market size and its OFDI

Answer 1

positively associated -> the larger a countr’s market, the more it invests abroad

Question 2

how about the relation of market demand and OFDI

Answer 2

low market demand is not a push factor

Question 3

how is the correlation between economic development and OFDI?

Answer 3

appreciation in exchange rate makes OFDI a cheap option -> Economic Development def. a push factor

bc low interest rates means reduced costs for foreign countries

Question 4

Relation OFDI and Trade Openness?

Answer 4

positive link between the level of openness and the level of investments abroad

at least for country’s with a high level of OFDI

Question 5

relation OFDI and IFDI?

Answer 5

strong correlation!
countries with good performance in one area ususally perform well in others too

Question 6

how abt the correlation of OFDI and real interest rate of the home country?

Answer 6

lower real interest rates in the home country significantly increase their OFDI

Question 7

Correlation of OFDI and the home country’s real effective exchange rate? REER

Answer 7

stronger home currency significantly motivates the expanditure of OFDI

Question 8

OFDI & home country’s technological effort

Answer 8

positive relationship between technologcal efforts and OFDI, but varies by country or region

Question 9

10: OFDI and ICT goods import

Information and Communication Technology

Answer 9

positive relationship but mostly for countries with low level of OFDI

Question 10

FDI is influenced by 3 factors - name them.
what are the 2 key drivers?
what is important?

Answer 10

Influenced by political, economic and technological factors.
Key drivers are GDP and higher economic development.
Importance of trade openness, lower interest rates and currency appreciation.