Nissan Automotive Research Paper Example | Topics and Well Written Essays - 1250 words

Nissan Automotive - Research Paper Example For example, Renault acquired one-third shares of Nissan, but it was not contemplating on building Renault’s plant in Japan or shifting its model production in Japanese factories. Alternatively, Renault appointed a star manager, Carlos Ghosn, at CEO’s position in Nissan. Ghosn restructured the company, hence restoring Nissan to profitability (Crooks, 2010). This analysis suggests a simple model for FDI where Nissan as a heterogeneous investor bid to secure the control rights on proposed or existing overseas assets; the formulation is capable of explicitly considering more than two countries or market. The model avails a strategy utilized in bilateral FDI for analyzing bilateral trade in goods; its specification entails an inward effect showing characteristics pertaining to the destination country, an outward efficacy indicating the features of origin country, and a vector consisting pair-specific variables that reflect monitoring costs (Forum, 2010). The model is applied or estimated using five countries. In the second stage, the estimated outward and inward fixed effects related to variables that are predicted by the model. Then the formulation of the model is aggregated into yielding simple table used for each country’s share of the world Automobile FDI (Obashi, 2010). Many firms engage in FDI without exploiting the external markets directly via the exportation. They focus on location, internalization, and ownership advantages with internalization of intangible assets. Ownership advantage depends on the managerial and technological superiority of home country’s firm in relation to the hosting country firms. This superiority should be sufficient to deal with the extra costs incurred as a result from differences in business customs, informal and formal norms, and languages. As a result, the ownership is directly linked with control; hence control turns weaker when ownership