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UGF Lecture 6Management > Global Firm > Kojima > Case A > Case B > Conclusive remarks
Conclusive remarksCase A The motive for FDI was to find new sources of competitive advantages (cost-competitive inputs) that complement the industries' specific productive assets (technology etc.). Case B FDI is caused by different factors to Case A, where the aim is to protect profit levels against a negative threat, but this will result in lowering welfare over all. Unfortunately it is sometimes the case that this situation is the only option, as C4 may have put in place high levels of trade restrictions, which would force C3 to change from exports to FDI in C4. It may also be the case that C3 is seeking competition-reducing strategies, which may induce it to engage in FDI into C4 (e.g. the second phase of the PCM).
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