Reference no: EM133022635

Should the world move to a standard methodology for measuring and reporting Foreign Direct Investment (FDI)?

Kerner (2014) hypothesized that, "If the relationship between democracy and FDI is driven by political risk, we should expect it to be more evident in measure of fixed capital expenditures by majority-owned affiliates than in the flow and stock data that are more commonly used to test this proposition" (p. 813).

Did Kerner's (2014) study answer our question about whether to develop a standard methodology for measuring and reporting FDI?

After completing the module's reading, respond to the questions concerning Kerner's (2014) article: What we talk about when we talk about foreign direct investment. (Links to an external site.)

1. Complete the following:
2. What is the author's major concern about measuring FDI?
3. Provide three examples of policy instruments that governments can use to influence FDI.
4. Does his analysis provide sufficient evidence to answer the question of whether the world should adopt a standard methodology for measuring and reporting FDI? Include an analysis of the benefits and costs (the downside) of FDI. Provide specific supporting evidence of why or why not.