United States is probably the most admired country in the planet today. Although there are few statistical figures to prove the belief, going by the actions of most people towards, America, it is understood that the country has a special place in the hearts of many. The assertion could be true owing to the strict migration rules, which have been put in place by the country to control the number of people going to the country. Of course, people will only like to go to a favorable country. Going by this assertion, many people handle Americans with some bit of compassion, which lacks in the treatment of other people from other origins.
If the aforementioned assertion has some truth, which I believe is, the same has been transferred to the international business involving companies of America origin and other foreign companies. Perhaps, the success of the country in different respects is essential in the determination of the companies associated with United States of America.
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Foreign Direct Investment is a commonplace in the business field and international interaction. This is the investment in terms of buying stocks, acquiring buying shares in a company of another country. The other country in this case is the host company while the foreign company, which is in vesting in the host company, is the foreign partner. Different countries have different policies and legislations the Foreign Direct Investment (Fahim-Nader 1996). The policies vary depending on the ideologies harbored by the host country. Some countries are capitalistic and therefore believe in the mercantilists theories of capital accumulation and low capital outflow while other countries believe in communism and therefore do not have the same policies. The difference in the policies determines the difference in penetration level and the ease of doing business with such countries (McCulloch 1996). Companies affiliated or the companies which in one way or another have their roots from the United States have had a little bit of ease in doing business with other companies in the light of Foreign Direct Investment. This statement would be doubted until a case study of a company, which got their way through to a contract table by virtue of being associated with the United States of America, is enumerated.
Nigeria’s Economy is largely defined by the production of Oil and its products. It is a very influential member of the Oil Producing body, OPEC (Oil Producing Economies). The presence of vibrant and cheap labor force, the growth level of the country and the general relationship of the country with the United States makes it a strategic partner in the Western country y of Africa (McNeil 2006). Recently, the United State Representative in Lagos released an increase in the amount of trade and the United States Foreign Direct Investment in the country. The country has a number of governance problems starting from the purported interreligious conflict and to the civil war, which is threatening to divide the country into two. The military prowess which United States plums itself of and the largely influential nature of the country to the World Business, makes the two countries perfect trade partners and a good match to conduct Foreign Direct Investment. According to Forbes, Nigeria has been the destination of about $ 20 billion Foreign Direct Investment in the last three years (Fahim-Nader 1996). Despite the vicious insurgency of the Muslim extremists and other problems, which the country faces, it has an upper hand in accommodating some of the World greatest companies.
The Foreign Direct Investment regulations and policies of the Nigerian government are flexible and accommodative. Some experts have described the laws as ‘too lenient’. If the laws are indeed too lenient then it is because of the relationship, which the country has with other countries such as United States (Leopold 2006). The United States has for a long time played a critical role in the business field of Nigeria. Nigeria is today a host to a number of companies’ multinational companies, which trace their origin form United States. The face of Nigeria’s Capital is fast changing due to the large investment in the Foreign Direct Investment.
In 2012, the United States giant company SABMiller opened a $100 brewery plant in Onitsha, Nigeria. The building of this company marked the first on to be building in the country. The operations at the company had started earlier following the making of all arrangements in relation to the establishment of the company. The establishment of the firm markets a great investment of more than 1 Billion dollars off to the African market by the company, which has received accomplishments and recognition worldwide. The Foreign Direct Investment of United States in Africa has grown tremendously in the past few years with Nigeria and South Africa taking the largest shares. The brewer has invested a lot of its portfolio in Africa and specifically in West Africa due to the availability of cheap market and cheap labor and other factors of production. Nigeria specifically had to be the destination for the SABMiller planned expansion in the portfolio because the country has a vibrant growth populace and a large population, which offers cheap market and a vibrant market for its products. The recent economic growth curve of the West African country makes the country the best bet for establishment of an extension of the SABMiller brewer (Hitt 2010).
Despite the fact that, the company has a reputable record of accomplishment in other countries and hence the likelihood of the company making successful business move in the region, the rules were still applicable and, therefore, they should have not been bent for the favor of the multinational. In my own thinking, I believe the laws on the Foreign Direct Investment and the policies were loosened for the sake of the SABMiller Company in the quest of need to establish a new branch in the West African country. To this end, it would be prudent to conclude that the company was just given chance to operate the Foreign Direct Investment just because it was affiliated to United States and that unit had succeeded in other areas (Lowe 2006). Perhaps, the decision was also informed by the fact that the country was in the verge of having bilateral relationships with the United States (Handy 1996).
Being American, indeed is nice, it gives one a superior feeling, a feeling others call, ‘superpower’. The America’s place in the world is reserved and no one can tackle that. Apart from the Foreign Direct Investment issues involving the companies affiliated to the United States, the country has gained reputation in nearly all fields making it best known as a country for superstars. Naturally, people would like to associate themselves with success and arrange for the association of such nature. This record of accomplishment of the United States in the International platform gives it an upper hand in handling the world issues related to the interests of America (Lowe 2006).
Foreign Direct Investment is a practical way through which countries, which lack basic factors of production such as land, labor, and may want to major on to prove to the rest of the world and be at par with them. Countries like United States, which experience age of mass consumption according to economic theories, lack labor, therefore, would want to spread most of their investments in other countries hence facilitating the sloughing back of profits to the mother country (Kareem 2012).
United States of America has invested heavily on its Foreign Direct Investments. It gets reputation and recognition in terms of foreign tax holidays, incentives among other governments initiated ways to lure their investments. Compared to other countries, United States has an upper hand in the handling of the world’s affairs due to its place, which it has earned in the International platform.
- Fahim-Nader, M., & Zeile, W. J. (1996). Foreign direct investment in the United States. Survey of Current Business, 76(7), 102.
- Fahim-Nader, M., & Zeile, W. J. (1996). Foreign direct investment in the United States. Survey of Current Business, 76(7), 102.
- Handy, C. R., Kaufman, P., & Martinez, S. (1996). Direct investment is primary strategy to access foreign markets.FoodReview, 19(2), 6-12
- Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2010). Strategic management: Competitiveness and globalization; [concepts and classes]. Mason, Ohio [u.a.: Thomson South-Western.
- Kareem, S. D., Kari, F., Alam, G. M., Chukwu, G. O. M., & David, M. O. (2012). Foreign direct investment into oil sector and economic growth in Nigeria. The International Journal of Applied Economics and Finance, 6(4), 127-135.
- Leopold, G., & Maniam, B. (2006). FOREIGN DIRECT INVESTMENT IN THE UNITED STATES: COUNTRY ANALYSIS. Journal of Economics and Economic Education Research, 7(1), 81-93
- Leopold, G., & Maniam, B. (2006). FOREIGN DIRECT INVESTMENT IN THE UNITED STATES: COUNTRY ANALYSIS. Journal of Economics and Economic Education Research, 7(1), 81-93.
- Lowe, J. H. (2006). Foreign direct investment in the United States: Detail for historical-cost position and related capital and income flows, 2002-2005. Survey of Current Business, 34-39.
