INTERNATIoNAL BUSINESS

International Business

[Name of the writer]

[Name of the institution]

International Business

Introduction

This research work represents those issues involved around FDI because of the global crisis. Noting first the most relevant background of the economic crisis of 1929 relating to Netherlands. The main causes of the decline in FDI are summarized that the country must not only deal with internal external causes if not also ocaciondando and investment challenges. The causes and repercussions bring necessary items quelled understand what the country can view more affected by exchange receipts in order to act, to return to attract investment through measures taken by the government and to have economic growth.

Discussion

The Netherlands is one of Europe attracting more foreign direct investment (FDI). A strong international focus and a liberal policy vis-à-vis foreign investment is the features of the policy of the Netherlands in this field. Many Dutch companies are multinational in nature and a number of them are listed in foreign exchanges. There are no regulatory restrictions on foreign direct investment. After having fallen back in 2008 following the global financial crisis, FDI flows have started to increase, a trend expected to continue despite an unfavourable international context. The World Investment Report 2011 UNCTAD ranks the Netherlands in the forefront with regard to countries with high potential and good performance for FDI.

Foreign Direct Investment

2008

2009

2010

FDI inflows (USD million)

7621

34,514

16,141

Stocks of FDI (million USD)

638,801

659,305

589,825

Performance Index *, ranking on 141 economies

140

54

-

Potential Index **, ranking on 141 economies

13

-

-

Number of Greenfield investments ***

173

155

-

FDI inwards (in% of GFCF ****)

-4.3

12.0

-

FDI stock (% of GDP)

73.2

75.3

-

Source: UNCTAD - last available data.

Performance index UNCTAD is based on a ratio of the country's share in total world FDI inflows and its share in global GDP. The Potential index is based on UNCTAD 12 economic and structural variables such as GDP, foreign trade, FDI, infrastructures, energy use, R & D, education, country risk. The Greenfield investments correspond to the creation ex nihilo of subsidiaries by the parent. The gross fixed capital formation (GFCF) is a measures the value of investments, essentially material, made for one year.

FDI flows by country and industry sectors

Investor countries

2010, in%

United States

15.9

UK

13.4

Luxembourg

12.1

France

9.9

Germany

8.3

Belgium

6.9

Ireland

4.7

Invested sectors

2010, in%

Mining, oil, chemicals

25.3

Banks and insurance

17.4

Food, drinks and tobacco

11.9

Trade

9.7

Transport, storage and communication

9.0

other services

13.5

Source: Dutch National Bank - last available data.

Netherlands comes in first place when it comes to the volume of inbound and outbound direct investment. This lead is flattered by the favourable tax treatment of these investments in the Netherlands. However, if there is corrected Netherlands continues with a listing in the global top 10 is a major investor. Because of the greatly increased interest in direct investment, the IMF launched the worldwide collection of information on direct investment. The results from these so-called Coordinated Direct Investment Survey (CDIS) have been recently published on the website of the IMF. Netherlands show in late 2009, for an amount of USD 3.700 -13824 in direct investment abroad. This means that Dutch companies in total for the amount invested in affiliated foreign companies. This is approximately 18 percent of the total outward investment as provided by the participating countries to the IMF ...