Essays on Greenfield Investment - Canada and the Philippines Case Study

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The paper "Greenfield Investment - Canada and the Philippines" is a perfect example of a business case study. In the past twenty years, foreign direct investment (FDI) has become the main source of capital inflows for both developing and developed economies. These kinds of investments are usually made by multinational companies that enter a local market either through Brownfield or Greenfield mode. Brownfield FDI refers to cross-border acquisitions and mergers. These two types of FDI have different effects on the market competition, social welfare, consumer surplus, and of the host country (Nocke & Yeaple, 2008).

Greenfield investment involves a parent company starting a new venture in a foreign country through the construction of new operational facilities beginning from the ground up. The companies create new long-term jobs in a foreign country through hiring new employees. Advantages and disadvantages of investing in both countries Advantages of Greenfield investment in the Philippines Direct foreign investment had clearly decreased in the period 2008-2009 owing to the unfavorable international economic environment; nevertheless, it started to pick up in 2010. In the year 2012, the Foreign Direct Investment influx grew by a rate of 15.5% as compared to this year.

There are advantages to investing in the Philippines. The education system churns out many graduates who offer excess skilled manpower for that economy. Filipinos speak English and thus making it easy for an Australian company to operate there. There will be a huge and cheap labor force and besides, many of the raw materials have not been exploited fully. It will be an opportunity for the Australian multinational to take advantage of the cheap labor as well as the raw materials available (Neary, 2007).

The company will be to Philippines superior technology that will enable it to attract competent and well-trained workers. Methods of production which are efficient can be invested in the Philippines as a duplication of the parent company in Australia. The Philippines has strong cultural proximity to the US hence making it easy for the Australian values to fit in.

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