Chat with us, powered by LiveChat Question: Please respond to the following discussion post: Host governments utilize a wide variety of contr… | Writedemy

Question: Please respond to the following discussion post: Host governments utilize a wide variety of contr…

Question: Please respond to the following discussion post: Host governments utilize a wide variety of contr…

Please respond to the following discussion post:

Host governments utilize a wide variety of controls to restrict foreign direct investment (FDI) in one way or another, including ownership restraints and performance requirements, which are the two most common controls. Foreign direct investment (FDI) is defined as, “direct investment in business operations in a foreign country.” (Hill, p. 627, 2015). Based on my reading of the Closing Case “Walmart in Japan”, there are a number of reasons why the level of FDI or foreign direct investment has been so low in Japan, historically. However, several of the most essential reasons are the regulations of the Japanese government that made it difficult for companies to establish direct presence in Japan, along with cultural differences. In addition, the government enacted a large Scale Retail Store law to protect politically powerful small retailers. This law made it impossible for foreign retailers to open mega stores in the country, eventually the law was abolished in 1994. (Hill, pp. 244, 249, 2015).

Some of the potential benefits to the Japanese economy of greater foreign direct investment are: Japan’s capital investment increased faster than domestic companies (per employee), their profit margin grew faster than domestic companies, employees are paid higher salaries, sales and profit margins are substantially higher than domestic corporations, etc. (“Case on Walmart, “ 2018). Despite these setbacks, Walmart adjusted to the Japanese market, and created special products to cater to the aging Japanese

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