What political apply
Before one invests in one country, there is a need to ensure that all factors have been considered. There is need to check the country that one desires to invest in. what politics will favor the investment, what issues lie on the way to investing in the country. Foreign direct investment entails many factors. Before one makes a decision to invest in one country, politics plays an important role. This paper will look at the investment decision that will have to be considered when investing in Germany. Germany is a safe place to invest for the stability of politics. Germany is the preferred country for direct investment by foreigners (Blomstrom, Lipsey, & Kulchycky, 1988).
The government has a good foreign investment policy. This is one reason as to why many countries are investing here. There is good technology and infrastructure that has been put in place to ensure this. Technology is an issue that has helped. Technology is emphasized as a driving agent for the internationalization of the operations of the firm (Caves, 1982). For example the products; a firm can be able to produce variety of products by use of technology personified in it, which is preferred by the customers over a variety of similar products produced by rival firms. It becomes a great idea to invest in Germany because it is a developed country and technology has advanced drastically being an advantage to the firm. Brand names and copyrights is yet another reason why I should exploit worldwide, and this can pass on palpable competitive advantages. The firm will be known worldwide therefore increasing the growth of the firm. It will give the firm a chance to owe a brand name.
Human capital (employee skills), is yet another consideration for foreign direct investment. In a more developed country like Germany the skills of the employees are seen to be great therefore investing in such country is a great idea, for the firm will continues learning more and more leading to rapid expansion. Back at home, the other employees will also have an opportunity to acquire more knowledge from those in Germany because they will be working hand in hand to make the firm to be a success. The size market of Germany is wide so it is good for my firm to directly invest there because of great incomes. In addition, exporting will be easier because the firm will be there, the advantages are costs will be reduced, time will also be saved. A more developed country has economic power than the domestic or local competitors. Therefore directly investing will be an advantage to the firm because it will be difficult for the firm to be affected economically in a negative way without immediate action being taken (Chan, 1995).
The other reason for foreign direct investment is that a developed country accounts for most of the universal FDI outflows and inflows, but for developing countries are becoming more significant as host and home countries. The other advantage is the security of the country at large. Germany has been seen to have a good security therefore when a firm is established there; there is an assurance of security of the business (Chen, 1994).