Question

Identify the top five recipient countries of FDI from the US. Then Identify top 10 MNEs headquartered in the US that have made outbound FDI elsewhere. Why do theses countries attract FDI from the US? Explain using the resource and the institution based views.

Answer 1

Answer:

The top five recipient countries of FDI from the US are:

• The Netherlands - 866.33 billion dollars
• United Kingdom - 757.78 billion dollars
• Luxembourg - 713.83 billion dollars
• Ireland - 442.17 billion dollars
• Canada - 401.87 billion dollars

Those countries attract FDI from the US either because of low taxes, including low corporate taxes (The Netherlands, Luxembourg, Ireland), or for very close relationships at all levels: cultural, commercial, geographical, and so on (Canada, and the United Kingdom).

From a resource perspective, only Canada is particularly resource-rich, it has large quantities of natural gas, oil, and metals.

The other four countries are not resource-rich, instead, they have institutions that protect property rights, that promote investment, and that do not charge very high taxes.