Foreign Direct Investment - Managing International Joint Venture - Case: NAFTA

Essay from the year 2003 in the subject Business economics - Business Management, Corporate Governance, grade: 2, Lappeenranta University of Technology (Business Department), course: International Business Methods, language: English, abstract: The importance of international trade to a nation's economic welfare and development has been heavily documented in the economics literature since Adam Smiths pioneering inquiry into the nature and causes of the wealth of nations. There are several theories under rubric of foreign direct investment (FDI), including the internalization theory. Internalization theory centres on the nation that firms aspire to develop their own internal markets whenever transactions can be made at lower cost within the firm. Internalization theories endeavour to explain how and why the firm engages in overseas activities and in particular how the dynamic nature of such behaviour can be conceptualized (Morgan et al., 1997).