What is the primary reason foreign investors in manufacturing are attracted to developing countries?
Please select the best option.
1)loose working regulations
2)abundantlow wage workers
3)equipment and facilities are cheap
4)middle and high skilled is available
answer 4)
answer 4)
EXPLANATIOn
Flows of foreign direct investment in manufacturing going to middle-skill and higher-skilled activities is 14 times great than flows to lowest skill activities. That is, by far the greatest amounts of foreign direct investment in manufacturing go to create auto parts and auto assembly, electronics, chemical and petrochemicals, medical devices rather than simply to create garments, footwear, and toys. Moreover, the proportion of FDI flows to middle and higher skill operations is speeding up over time. Workers in these plants earn 2 to 4 times the wages in lower skill plants, and supervisors, engineers and managers may earn more than 10 times as much – even though such wage levels may still be substantially cheaper than industrial wages in the US, UK, Japan, or Germany.
We ended with a surprise, and that is that flows of investment into
ReplyDeletedeveloping countries don't go primarily into lowest wage, lowest
skill jobs like garments and footwear.
Rather by a factor of 14--
14 to 1 times greater the flows of foreign direct investment go into
middle skilled and upper skilled activities like autos, and auto parts,
electronics, chemical, and petrochemicals, medical devices,
industrial equipment.