Revision

Course:
International
Name: Nguyễn Thị Ngọc Mai Investment
Class: 211 – INE4002 E*

A. True/False questions

1. One of FDI policy ‘s objectives of the host country is to retain national control
over strategic industries.
a) True b) False

2. By adjusting ownership ratio in FDI projects, the host government may affect FDI inflow.
a) True b) False
Có thể thay đổi mức độ: vdu nó đc thay đổi 10% thì ảnh hg đến dòng đầu tư vào
3. Complex fiscal incentives imposed by the host country sometimes are inefficient or
even distort location of FDI.
a) True b) False
4. Establishing industrial zones, export proccessing zones is one of the host country’s
Foreign Direct Investment attraction measures.
a) True b) False

5. Africa may be attractive to foreign investors because it favors with abundant

natural resources and imposes liberalization policies.
a) True b) False
6. FDI is seen by executives as a means of circumventing future trade barriers.
a) True b) False
7. International investment speeds up the specialization and production co-operation
between countries.
a) True b) False
8. Joint-venture, Wholly-foreign-owned enterprise, Business Cooperation Contract,
and BOT are forms of FDI classified by ownership characteristics.
a) True b) False
9. Eclectic paradigm is called OLI paradigm created by John Dunning.
a) True b) False
10. FDI policy is an integral part of a nation’s economic development policy made out
to regulate FDI activities in order to achieve the goals of economic-social development
plan of the nation in a certain period.
 a) True b) False
11. Direct investment consists of purchases and sales of securities, such as bonds and
stocks, in amounts that do not imply any direct management control or influence on the
businesses issuing the securities.
a) True b) False
12. Vertical FDI consists of MNE investments that duplicate facilities and operation in
several countries.
a) True b) False
13. Vernon’s theory is also known as the market imperfections approach.
a) True b) False
14. MacDougle-Kempt theory does NOT argue that FDI contributes to raise
income in host, home and the world economies.

a) True b) False

15. Flying geese pattern built by Koijima explains the catching-up process of
industrialization of latecomer economies.
a) True b) False
16. In developing countries, about one-third of FDI is in the form of mergers and
acquisitions.
a) True b) False
Các nước đang pt là hình thức GI, các nc pt là M&A
17. International investment speeds up the specialization and production co-operation
between countries
a) True b) False
18. Internalization theory is also known as market imperfection approach.
a) True b) False
19. Vernon, in theory of product life cycle, assumes that technology will be standardized
and commercialized so that it can be applied in other countries using less skilled labour at
lower labour cost.
a) True b) False
20. Globalization helps to promote the world FDI.
a) True b) False

21. It is said a major part of international investment before World War I took
the form of portfolio invetsment.
a) True b) False

22. Host governments sometimes worry that the foreign affiliates of MNEs may
have greater economic power than indigenous competitors.
 a) True b) False
23. Since 2007, in Vietnam FDI has been treated by Foreign investment Law, while
domestic investment has been treated by Law on promoting investment in Vietnam.
a) True b) False
24. FDI create jobs to the host country.
a) True b) False
25. Lately some government engages in FDI through Sovereign Wealth Funds?
a) True b) False
26. FDI does NOT benefit the host country's balance of payments if the foreign
subsidiary creates demand for home-country exports of capital equipment, intermediate
goods, or complementary products.
a) True b) False
27. One of the problems of licensing is that it may result in a firm's giving away
valuable technological know-how to a potential foreign competitor.
a) True b) False
28. Portfolio investment consists of purchases and sales of securities, such as bonds and
stocks, in amounts that do not imply any direct management control or influence on the
businesses issuing the securities.
a) True b) False
29. Market imperfection is a motive for FDI.
a) True b) False
30. The WTO has been very successful in efforts to initiate talks aimed at establishing a
universal set of rules designed to promote the liberalization of FDI.
a) True b) False
WTO về thương mại, có liên quan đến đầu tư n ko hướng vào trade, FDI
31. Foreign investors DONOT care about macroeconomic stability of the Host country.
a) True b) False
32. All technology transferred via FDI positively impacts on the host country. Other
things being equal, the greater the capital investment in an economy, the more favorable its
future growth prospects are likely to be.
a) True b) False
33. Host country’s investment environment comprises such factors as political
instability, culture, macroeconomic improvement level, investement policies and
legislation, natural conditions.
a) True b) False

34. One objective of Vietnam’s FDI policy is to guarantee lawful rights and interests of
foreign investors.
 a) True b) False

B. Multiple choice questions

1. Linkage effects to domestic sector are moderate, except the case when:
a) Domestic firms try to improve their competitiveness to engage in regional/global
production network
b) Domestic supporting industries are weak
c) Domestic firms operate are at low productivity and obsolete technology
d) Local firms’ products are at low quality
2. The rise in FDI in the services sector is a result of the following EXCEPT:
a) the general move in many developed countries away from manufacturing and
toward services
b) restriction on services.
c) many services cannot be traded internationally
d) many countries have liberalized their regimes governing FDI in services

3. Trend in settling disputes by political dialogue between countries accelerates

international investment because of the following reasons EXCEPT:
a) separate the world into different economic and political systems
b) reduce barriers on goods and production factor flow
c) promote safe investment environment
d) broarden economic cooperation between countries
4. Which of the following is a reason why firms prefer to acquire existing assets
rather than undertake greenfield investments?
a. Foreign firms are acquired because those firms have valuable strategic assets.
b. Firms immediately create new jobs for host country.
c. Greenfield investments are comparatively less risky for a firm
d. Mergers and acquisitions are more difficult for firms to acquire strategic
assets than greenfield investments

5. FDI stock is:

a) the amount of FDI undertaken over a given period of time
b) the total accumulated value of foreign-owned assets at a given time.
c) the flow of FDI out of a country
d) the flow of FDI into a country
6. Africa is unable to attract FDI because of the following reasons EXCEPT:
a) political unrest in the region.
b) armed conflict in the region.
c) liberalization of FDI regulations.
d) frequent policy changes in the region.

7. Which of the following is NOT a reason why firms prefer to acquire existing assets
rather than undertake greenfield investments?
a) Foreign firms are acquired because those firms have valuable strategic assets
b) Firms can increase the efficiency of the acquired unit by transferring
capital, technology, or management skills.
c) Even though greenfield investments are comparatively less risky for a
firm, acquisitions always yield higher profits
d) Mergers and acquisitions are quicker to execute than greenfield investments.
8. Policy on ownership and investment guarantee of the host country concerns the
following EXCEPT:
a) ratio of holding voting shares of a firm in host country by foreign investors
b) protect lawful rights and interests of foreign investors/ foreign invested enterprises
c) trade liberalization tự do thương mại
d) portion of capital contribution in a project by foreign investors
9. Process of screening FDI project and issuing investment license is a
a) troublesome administrative process
b) significant process to accelerate FDI attraction
c) process helps to speed up the project operation
d) significant process to select appropriate project. A.

10. Identify the INCORRECT statement regarding the direction of FDI.

a) historically, most FDI has been directed to the developing nations of the world
b) in the 1980s and 1990s, the United States was often the favorite target for
FDI inflows.
c) the developed nations of the EU have received significant FDI inflows
d) the recent inflows into developing nations have been targeted at the
emerging economies of South, East, and Southeast Asia.

11. The current global FDI trend is only one out of the what follows:

a) Among South-South and North-North countries

b) Among North-North, South-South, North-South and South-North countries.

 c) Among South-North countries

d) Among North-South countries

12. Which of the following is NOT stressed in electic paradigm:

a) Location advantage
b) Internalization advantage
c) Internationalization advantage
d) Ownership advantage

13. A foreign firm crowding in foreign firms means direct effect, crowding in
domestic firms means to the host country. Pleaae fill in the blank with one of the
following:
a) Vertical intergration
b) Horizontal intergration
c) Merger&Acquisition
d) Indirect impact kéo các DN địa phg vào
14. In a licensing arrangement, the bears the risk and cost of opening a
foreign market. Fill in the blank with one of the following:
a) Licensor bên
b) acquiring firm
c) Licensee bên
d) greenfield investor

15. is also known as the market imperfections theory. Fill in

the blank with one of the following:
a) Internationalization theory
b) Perfect markets theory
c) Closed economy theory
d) Internalization theory

16. Historically, most FDI has been directed at the nations of the world
as firms based in advanced countries invested in . Fill in the blank with one of the
following:
a) underdeveloped; underdeveloped countries.
b) developed; underdeveloped countries.
c) developed; each other's markets.
d) underdeveloped; each other's markets.
17. The suggests that a firm will establish production
facilities where foreign assets or resource endowments that are important to the firm
are located. Fill in the blank with one of the following:
Liên quan đến địa điểm đầu tư
 a) product life cycle
b) strategic behavior theory
c) multipoint competition theory
d) eclectic paradigm

18. The U.S. has been an attractive destination for FDI because of the following
reasons EXCEPT:
a) its small and unwealthy domestic market.
b) its dynamic and stable economy.
c) its favorable political environment.
d) its openness to FDI.

19. Three FDI cost concerns of host countries arise from the following EXCEPT:
a) debit on the current account of the home country's balance of payments.

b) adverse effects on competition within the host nation.

c) adverse effects on the balance of payments.

d) the perceived loss of national sovereignty and autonomy.

20. If Viettel, a Vietnamese corporation, purchased a 60 percent interest in of a Laos’

company, that purchase would be an example of a (n):
a) minority acquisition.
b) full outright stake.
c) majority acquisition.
d) greenfield investment
21. FDI is undertaken to serve the home market is known as:
a) greenfield investment
b) FDI substitution
c) home market FDI
d) offshore production

22. is one of the measures of the host country to attract FDI inflow. Pleaae
fill in the blank with one of the following:
a) Construction of Economic Zones and Export Processing Zones.
b) Changing macroeconomic policies in the Home country
c) Signing international aggreements
d) Opening the economy.
23. John Dunning, a champion of the eclectic paradigm, argues that:
A. the firms that pioneer a product in their home markets undertake FDI to produce a
product for consumption in a foreign market.
B. combining location-specific assets or resource endowments and the firm's own
unique assets often requires FDI.
C. a firm of an oligopolistic industry expanding into a foreign market causes other
firms in the industry to make similar investments.
D. impediments to the sale of know-how increase the profitability of FDI relative to
licensing.
C. ESSAYS/PROBLEM SOLVING

1) Explain the trends of FDI inflow in Vietnam in the forms of Joint-venture and
100% foreign owned enterprise in 1988-2020.
 2) Suppose the inward FDI creates both direct and indirect positive impacts on the
host economy. Which is more important to the host country? Explain?

POSITIVE EFFECTS OF FDI ON HOST ECONOMY

FDIs benefit the host country in a variety of ways. It promotes economic growth by
enhancing the host nations' productivity and exports. Imitation, skill acquisition, competition, and
exports are four routes that aid in boosting the productivity of the host nation.
The indirect technology transfer that occurs between the MNC and the domestic
enterprises benefits the local firms in the host nations. Local businesses can compete more
successfully in export markets by emulating multinationals' better technology or management
skills.
Domestic enterprises get more exposed to overseas markets, and their understanding of
those markets grows as a result. Managers and other qualified staff of domestic enterprises get
superior management and technical abilities, boosting their productivity.
 Multinationals enhance market competitiveness, causing local businesses to invest in
physical or human capital to become more efficient. They assist host nations enhance industrial
efficiency and resource allocation by entering markets with high entry barriers. As a result of
joining these monopolistic sectors, they enhance competition and drive local businesses to
improve their skills. This is how multinationals and other foreign enterprises motivate indigenous
firms to enhance their performance and productivity.
Multinationals also persuade local suppliers of intermediate items to improve delivery
speed, quality, and dependability of products in order to satisfy the foreign company's high
requirements.
FDI appears to have a favorable influence on the labor market. Domestic businesses will
not hesitate to pay greater wages to workers if their productivity rises as a result of adopting
multinationals' production model, which is predicated on increasing labor productivity.
Multinationals also raise the bar for the host country's labor market by giving workers with
training and preparing them to operate complex machinery, so raising productivity.
Finally, FDI has a favorable impact on the host nation's economy by generating tax
revenues, strengthening the country's exchange rate, and encouraging the government to
implement policies that would attract additional MNCs to the country.
NEGATIVE IMPACT OF FDI ON HOST ECONOMY
- Crowding out of domestic investments
By establishing a monopolistic environment, FDI pushes out indigenous investments.
There are two ways to describe this. To begin with, MNCs raise funds in the domestic market,
raising demand for money and, as a result, interest rates, which drive out domestic investments.
Second, when MNCs join a new nation, they bring large investments with them, increasing the
country's overall money flow. This raises aggregate demand, which leads to an increase in prices
(inflation), which raises expenditures, reduces savings, and eventually forces individuals to
borrow money, resulting in higher interest rates. Local investments are so squeezed out in this
manner. Foreign corporations have more promotional clout, market dominance, and predatory
pricing to deter entrants.
- Infrastructure constraints
Multinational corporations obstruct the development of a country's infrastructure. Multinational
corporations are always drawn to the more favorable parts of a country. As a result, rural and
disadvantaged areas are overlooked, and they stay undeveloped.
- Country’s trade balance
Financial inflows cause currency rates to rise, making exports more difficult. When
multinational corporations (MNCs) join a country, they bring with them foreign exchange,
increasing their supply. This strengthens the host-country currency, making local items more
costly in international markets, and reducing the host country's overall exports. As a result, the
country's net exports have decreased, the BOP might turn unfavorable.
Also affected are the capital and current accounts. When the MNC joins the host country,
it may have past raw material or intermediary product suppliers from whom it purchases
secondary materials; this would result in a rise in the nation's imports, making the BOP
unfavorable. Second, MNCs return their revenues, management fees, royalty fees, and other
payments to their home nation, putting a strain on the country's capital account.
- ECONOMY
Multinational corporations are frequently found in close proximity to one another. MNCs
have a tendency to concentrate on specific industries in order to take advantage of location, labor,
and resources. As a result, the economy becomes overly reliant on multinational corporations.
MNC removal from such places might severely stifle the economy, and this is considered as a
major issue in underdeveloped countries.
https://www.ukessays.com/essays/business/impact-of-fdi-on-host-economy.php
 3) Figure below denotes MacDougall-Kempt model, it is supposed that there are
two nations (I, II) in the world, that possessing OO’ capital of which Nation I owns OA
capital, Nation II owns O’A capital, (OA>O’A); Nation I confronts FF’ curve being the
curve of value of marginal product of capital (VMPK1), and Nation II does with JJ’
curve (VMPK2); VMPK2 is higher than VMPK1. Please identify:
a. GDP of each Nation before and after the movement of AB capital from Nation 1
to nation 2 Change of each Nation’s GDP after the movement of AB capital from
Nation I to Nation II.(Please clearly identify by which area GDP increase or
decrease) (10 points)
b. Volume of loss / gain of Nation II’s owners of capital/ owners of other
production factor after the movement of AB capital from Nation I to Nation II
Capital owner losses THMR; Owner of other production factors gains HMET

Figure . MacDougall-Kemp Model

F J

N T
C G

O
B A O’

* Before AB capital movement

Nation 1
-Total capital: OA
- Interest rate: OC
- GDP = OFGA
- Owners of capital: OCGA
- Others: CFG
Nation 2
-Total capital: O'A
- Interest rate: O'H
- GDP = O'JMA
 - Owners of capital: O'HMA
- Others: HJM
O'H > OC 🡪 a part of the capital of country I (AB) will move to country II and will stop at the
interest rate that needs to be equal between the two countries, BE (ON=O'T).
* In nation I
When there is AB capital movement
- Total capital: OA
- where AB is overseas investment
- Interest rate: ON
- GDP = OFERA
- Domestic output: OFEB
- Revenue from investment: ABER
Compared to before investment
- Additional output: ERG
- Owners of capital benefit: CNRG
- Owners of other elements lose: CNEG
* In nation II
When there is AB capital movement
- Total capital: O'B
- where AB is investment capital from country I
- Interest rate: O'T
- GDP = O'JEB
- Moving back to country I: ABER
- The rest: O'JERA
Compared to before capital move AB
- Increased output: ERM
- Owners of capital lose: THMR
- Owners of other elements benefit: THME
🡪 increase in world’s GDP is EGM.
 4) FDI may cause crowding-in effect to the host country. Explain and give
examples to illuatrate.
FDI could have a complementary (crowding in) relationship with domestic investment.
The crowding-in effects imply relatively lower output by FDI-firms compared to
domestically-owned firms. An industry-level crowding-in effect as the share of
foreign-owned firms in turnover is lower when the industry-level of foreign capital intensity
increases. This crowding in effect was mainly attributed to the complementarity of activities
from FDI with established local ones
Example: Indonesia, Malaysia, Thailand: FDI sometimes indirectly affects the
formation of domestic investment. TNCs have invested in new host country industries such
as electronics, toys or other export consumer goods. Without TNCs, these investments are
not made. First, however, foreign companies mainly invest in assembly, with little links to
other sectors of the economy. Over time, service providers and input materials will form.
One of the pioneering studies for subsequent research on the crowding-in or
crowding-out effect of FDI was performed by Agosin and Mayer (2000). The study included
a variable for FDI while domestic investment had to be specifically modelled through
different variables. The results from the analysis differed for the three regions. While Asian
countries experienced a significant crowding-in, there was a strong crowding-out effect in
Latin America. African countries also experienced crowding-in of domestic investment but
to a lesser extent compared to Asian countries.
http://wtochairs.org/sites/default/files/4%20conference%20paper%20EDAMBA52Seetanah
_Matadeen_Fauzel_Gopal%20%28crowding%20in%20or%20out%29.pdf

5) Figure below illustrates the model of Firm’s Decision, Horizontal axis denotes
market size and Vertical axis denotes price /cost in a host country, Please explain
a. What do C, ACd, ACf curves and M1M1 denote?
C is transaction cost curve faced by the foreign firm in the host country;
ACd is average cost curve faced by domestic firms in the host country;
ACf is the average cost curve faced by foreign firm (ACf= ACd+C) when investing
in the host country;
M1M1 is market price (including import tax) accepted by consumers in the host
country

b. Supposed the host market size is larger than OA and smaller than OC, which
mode of entry will foreign firm choose? Do you think foreign company like this
mode of doing business? Explain. Supposed the host country increase import tax,
the market price M1M1 (comprising import tax) shifts to M2M2, Which mode of
entry will the foreign company choose if the host country’s market size is OC?
Explain.
Fig. 1. Model of Firm’s Decision
Assume that MS stands for Market Size. Based on theoretical models of the firm’s decision, if: OA
< MS ≤ OC 🡪 licensing will be chosen as a foreign entry mode;
Because OA < MS ≤ OC 🡪 Foreign companies invest in profitable, local companies can also
produce.
🡪 the foreign company will lease the technology to the local company and choose the licensing
method.

At first, market accpeted price is M1M1. That the host country increases import tax shifts the
market price curve upward to M2M2, intersecting AC D and AC F at A 2 and C2 respectively.

OC2 ≤ MS: foreign direct investment (FDI) will be chosen as a foreign entry mode. Because
when a foreign company sees a higher market demand than OC, ACF < M1M1 🡪 use production
technology to supply the market
 6) It is argued that FDI brings about positive and negative impacts on the
host country’s environment protection? Give evidence and explain
NEGATIVE IMPACTS
Environmental Pollution
As investors search the world for the best potential profits, they are frequently
drawn to areas rich in natural resources but lacking in robust environmental legislation
to regulate their discoveries. Foreign investors may engage in economic activities that
are detrimental to the communities in which they operate.
For example, Timber corporations may remove forests to make place for
building. Given the importance of vegetative cover for the hydrological cycle, such
operations have a detrimental impact on the ecosystem. FDI also encourages
western-style consumerism by increasing automobile ownership and paper consumption.
This has a detrimental impact on the natural world, the earth's climatic stability, and
food security.
FDI is both an opportunity for technology transfer, but sometimes it turns
FDI-receiving countries into technology dumps where outdated technologies are
consumed that no longer meet national standards.
Many serious environmental pollution cases of FDI projects have caused bad
consequences for the ecosystem and reduced sustainability of economic growth. For
example, the Project Formosa in Ha Tinh causes marine environmental incidents in
2016; Vedan Vietnam was found causing "death" of ThiVai river; Vietnam Miwon was
sanctioned for over discharging wastewater allowable technical regulations; Vietnam
Mei Sheng Textiles Co., Ltd. was sealed its dying house for illegal construction and
discharge emissions polluting the environment or Lee & Man Paper Factory is found to
pollute the environment.
POSITIVE IMPACTS
FDI has a positive impact on the environment through the introduction of new
energy-saving products, reducing dependence on traditional raw materials or energy
sources, and solutions to improve production efficiency. or good experience in
environmental protection.
Currently, FDI along with the reduction of environmental pollution is an
inevitable investment trend, and at the same time, investment recipient countries are
increasingly focusing on strengthening environmental protection policies, so when a
Countries that receive clean FDI projects have the opportunity to receive modern,
environmentally friendly treatment technologies. Both economic benefits and
environmental protection are increased.
Among FDI projects, there are still a few relatively "clean" projects that not only
bring economic efficiency but are also environmentally friendly, implemented and
operated in the direction of environmental protection of the land. country. A new feature
in attracting FDI is that there are more and more large projects such as the tire
production project of Kumho Asiana Group (Korea) with a total investment of 360
million USD, and the My Phuoc Ecological Urban Area project by SP. Setia Berhad
(Malaysia) and Becamex IDC cooperated to invest with a capital of 620 million USD,
the project of a factory to manufacture sphygmomanometer accessories of Key Plastics
Vietnam Co., Ltd. to serve medical equipment manufacturers. electronics... focus on
high-tech, environmentally-friendly values.

7) FDI may cause both direct and indirect impacts on the host country’s capital
formation? Explain.

Effects on capital formation

Direct:

+ International Investment inflow: FDI is an important source of financing for transition

economies as it helps to cover the current account deficit, fiscal deficit (in case of
privatisation-related FDI), and supplements inadequate domestic resources to finance both
ownership change and capital formation. FDI can either act as a substitute to domestic investment
or it can complement domestic investment.

+ Crowding-in/out other foreign firms: FDI could have a complementary (crowding in) or a
substitution (crowding out) relationship with domestic investment. On one hand, due to increased
competition and better efficiency, FDI may replace domestic firms and deter their investment
plans.

Indirect:

+ increase domestic private and government savings, consequently increase investment

+ crowding-in/out domestic firms: foreign investment may boost domestic investment by

increasing demand for local intermediate inputs (Cardoso and Dornbusch, 1989) or through the
diffusion of knowhow and technology

https://www.nber.org/system/files/working_papers/w23049/w23049.pdf
8. Please explain why in certain cases, the host country worries about FDI in the form of
cross border M&A?

The first reason is to ensure national security because most of the M&A deals operate
in fields such as electronics, high technology, etc. These are sensitive activities and directly
affect national security. Therefore, the government needs to control cross-border M&A
activities to maintain and strengthen its role so that important industries and fields do not
depend on foreign countries and avoid the domination of foreign investors for national security.

Evidence: The Canadian government has said it has blocked the acquisition of a
construction company by Canada's Aecon Group worth 1.51 billion yuan by International Joint
Stock Company under China Communications Construction Corporation (CCCC) for reasons
related to national security. Aecon is a large Canadian construction corporation, headquartered
in the city of Toronto. Aecon specializes in building critical infrastructure systems, including
Toronto's iconic CN TV Tower. The plan to sell Aecon to CCCC has also been opposed by
many people, especially from businesses in the construction industry and former directors of
US and Canadian intelligence and security agencies. These agencies are concerned that the
CCCC will transfer information and technology to Beijing, and may make business decisions
that have a conflict of interest between the two sides. And based on the results of Canada's
national security assessment report, this acquisition is not beneficial to national security and
should be stopped. The deadline for finalizing Aecon's agreement with International
Corporation, the CCCC's foreign finance and investment arm, has been delayed from February
2018 after Canada extended the national security review deadline in the coming months. against
the backdrop of a growing trend of concerns about Chinese companies acquiring assets in
Western countries.

The second is about the competitive reasons: When participating in economic

activities, mergers and acquisitions will expand the power of large foreign companies, so
domestic enterprises will face great competition. The government needs to control the influence
of foreign enterprises on domestic economic activities to ensure that domestic enterprises'
production takes advantage of development opportunities. Avoid the situation that foreign
companies acquire too many domestic enterprises.

Evidence: The European stainless and specialityalloy steel industry is an essential player
in the EU in terms of employment and services to its customers, is competitive and setting
benchmark technical and environmental standards thanks to its strong R&D efforts. Today, the
European industry is put under tremendous pressure from global competition, in particular from
Asia where giant plants are built with often unfair subsidies, and the USA, where these
industries and markets are highly protected. The Speciality Alloy Division is addressing the
same global markets, in an environment where enlarged product offering, scale and R&D
capabilities are essential to compete. Facing conceptual roadblocks with the creation of a
European Alloys champion, not recognizing the existence of global markets for speciality
alloys products, is highly regrettable, and has led us to the conviction that addressing these
concerns of the European Commission would make a value accretive deal impossible. In the
interest of our shareholders we pursue our strategy and financial policy, hence are left with no
choice but to withdraw from the deal.

The third is prudential reasons: Host governments need to consider the potential
disadvantages of cross-border mergers and acquisitions in order to prevent schemes or unfair
deals affecting state ownership and management. as well as the country's economy

Evidence: On 15 February 2018, the Securities and Exchange Commission (SEC) of the
United States rejected a takeover of the Chicago Stock Exchange by a group led by
Chinese-based investors. The SEC said in a statement that the review process had raised
questions about “whether the proposed ownership structure [would] allow the Commission to
exercise sufficient oversight of the Exchange.” (WIR 2018, P.87)

The fourth is some other legal issues: The host country government should control
TNCs when the merger does not cause violations of the commercial interests of the country
such as tax payment or forward-looking regulations that may be risky and uncertain.

Evidence: Blackstone's $508 million deal to buy 113 crash repair shops owned by the
ASX-listed AMA Group, appears to have turned out to be the Australian Tax Office's serial
killer. In April 2018, Blackstone announced that it would acquire AMA's crash repair business
in an instrument analysis consortium, which would also result in the remainder of the Group's
business. The AMA continues to trade a vehicle that is separately listed on the ASX.To ensure
that the deal is stacked on a financial basis, Blackstone has asked the ATO to rule on tax relief
on capital gains.Sources said that while the ATO had expressed issues with the deal verbally, it
was hoped subsequent discussions with AMA and tax advisor PwChad proved fruitful.But
Blackstone's hopes have been dashed and it is understood advisers on both sides of the deal are
furious.Sources said tax experts view the ATO's knock-back as an extraordinary reversal of
practice and interpretation by the ATO, given how common demerger relief has become.
https://cuuduongthancong.com/sjimg/dau-tu-quoc-te

https://cuuduongthancong.com/pvf/3306559/dau-tu-quoc-te/tran-thanh-phuong/tra%CC%81c-n
ghie%CC%A3m-ftu-k46.pdf