Read the Management Focus on Cemex and then answer the following questions: Which theoretical explanation, or...

Read the Management Focus on Cemex and then answer the following questions: Which theoretical explanation, or explanations, of FDI best explains Cemex’s FDI? What is the value that Cemex brings to the host economy? Can you see any potential drawbacks of inward investment by Cemex in an economy?

Expert Solution

ans.....
a.

. Which theoretical explanation, or explanations, of FDI best explains Cemex’s FDI?

Cemex wanted to reduce their alliance with Mexico, and expand their market intoother countries in the world.
There was a huge demand in the cement industry inother parts of the world that Cemex could capitalize on.
By moving into othercountries, and buying less adequate cement companies, they would be able to boosttheir foreign direct investment by a large amount.

b.What is the value that CEMEX brings to a host economy? Can you see any potential drawbacks of inward investment by CEMEX in an economy?

The value Cemex would bring to a host country is the transference of their production, technological advances, and the teaching to become skilled workers andmanagers.
This can improve the overall economic development of the host country, byallowing for Cemex to bring their intelligence into their country.Some potential drawbacks could be long hours for the workers, directly working for the companies.
With the purchase of RMC of Great Britain, it made Cemex a global power house in the cement industry by adding another eight million dollars in sales.
Having such a big quota to fill every year and having to meet the needs they need tomeet, working conditions will not be ideal in foreign countries where labor and otherrelated laws are relaxed in that country.

Rahul Sunny answered 2 years ago

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