Introduction to Global Business

In this world, each and every nation makes an attempt to attract foreign investment on its own land. But some of these nations get success in bringing huge foreign investment in the nation. There are some of factors due to which few nations successfully attract attention of investors for bringing FDI in their nation. Some of factors that play a key role in attracting foreign investment in these nations are a follows.

1.Economic growth rate- Foreign investors before making any investment in nation look at its growth rate. Growth rate as a figure indicate lots of things. If in any economy growth rate is increasing consistently then it reflects that business operating in that economy is growing steadily. This happens because government of that respective nation is giving full support to corporate sector which are operating in the relevant nation (Porter, 2008).  This means that if any foreign investor opens his business in that foreign nation then he will get full support from the government and will be able to tap abundant demand that is available in the foreign market. High growth rate also indicate that there is good demand for products in the respective nation. Hence, economic growth is a factor which most of the foreign investor look before making investment in any foreign land.

2.Positive image- Positive image of a nation also plays significant role in attracting foreign investment in the nation. When any investor makes any sort of investment in any nation he on the basis of many factors evaluates the image of that nation (Johnson, Scholes and Whittington, 2008). On the basis of evaluation he decides whether to invest in the country or not. Countries like India and China build their strong image among the foreign investors and due to this reason many MNC are operating in these nations and creating ample job opportunities in the mentioned countries. Hence, positive image of nation plays a great role in attracting foreign investment in the nation.

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3.Ample opportunities- Foreign investors before making investment in any nation look at opportunities that are available to them in the specific nation. Countries like India are attracting those companies that require high level of intellectual people for their business (Grant, 2010). Whereas, China is attracting numerous companies on its land due to business friendly policy and low labor cost. So organization on the basis of demand, cost and availability of resources identify opportunities in other nation. Due to this reason, Asian nations are successfully attracting investment from numerous firms on their land.

4.Natural resources- In today era, the big problem that manufacturing organizations are facing is scarcity of resources. As a result, now manufacturing companies are investing investment in those nations in which lots of natural resources are available (Hill, and Hill, 2009). Those nations that are rich in natural resources are attracting heavy investment from companies which are operating in manufacturing sector of varied nations. Thus, availability of natural resources is also playing an important role in attracting investment from foreign investors.

5.Human resources- In today era, cut throat competition is going on between companies  and due to this reason these companies are paying due attention on reducing their cost. Due to recession, it becomes now inevitable for the firm because cost of raw materials is sky rocketing and due to low demand companies are earning low profit. Elevation in raw material cost cannot be passed to customers by enhancement of sales price of the product (Hillier, Grinblatt and Titman, 2011). Hence, companies are compelled to satisfy by earning low margin on per unit of sale. Due to all these reasons these firm are paying due attention on reducing their labor cost in order to generate economies of scale. In respect to this, companies are opening their business on foreign nations or outsourcing their activities. By doing this it reduce their employee cost substantially (Richards and Bergin, 2005). Many nations of Asia are receiving heavy foreign investment from foreign investors due to their low labor cost. Hence, in today era low labor cost of efficiency level of the people is also playing a key role in attracting investment from foreign


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