Question

You are working for a company that is planning to invest in a foreign country. Management has requested a report regarding the attractiveness of alternative countries based on the potential return of foreign direct investment (FDI). A colleague mentioned a potentially useful tool called the FDI Confidence Index, which is updated periodically. Find this index online and analyze how the index is constructed. Discuss the countries that are ranked in the top 20 based on the FDI Confidence Index using course concepts. What characteristics do they share and how do these contribute to FDI attractiveness?

Answer 1

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The index was constructed in 1998. It analyses how political, economic and regulatory changes will likely impact the amountbof FDI flowing into the country. It is generally referred to as AT Kearney foreign direct investment index. Over the past years there has been a strong correlation between Global FDI inflows and the FDI Rankings. It has been observed that developed markets have topped the index and are consistently seen in the top 25 slot of the total countries. Europe has all time record with 15 countries in the top 25 slot.

As per the recent data estimates, it has been observed that the United States has been ranked number one for the past Three years. Some other counties in the top slot include China, United Kingdom, Germany , Canada,Brazil. The common among these countries include strong economic fundamentals, ease of doing business in the country, less regulations , considering it at par with foreign investment. in All these factors developed nations are far ahead of developing nations.

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