Internatinal Business Management - Risk Analysis of Brazil Essay

Internatinal Business Management - Risk Analysis of Brazil - Essay Example The article has emphasized the need for FDIs in the agricultural sector of Brazil, and how with the proper flow of finance into this sector will help agriculture of Brazil reach the unfathomable heights. â€Å"Foreign Direct Investment (FDI) occurs when an investor based in one country (the home country) acquires an asset in another country (the host country) with the intent to manage the asset.† (Graham Jeffery P, 2005) Over the years FDI has helped a great deal in the globalisation and internationalisation of business ventures across the globe especially in the developing countries. According to a source from the UNCTD, in the developing countries annual FDI flow has increased from less $10 billion to $636 billion in the span of three decades that is from 1970 to 2004. (U.S. Dept of States, Jan, 2009) This huge increase in the flow of FDI was driven by the industrial mergers, acquisitions and globalisation of businesses. One of the main aspects of FDI is that it enhances the flow of capital and technology into the developing countries. This is generally beneficial to both the parties, the home ground and the host ground, that is, the country which makes the investment and the country which takes in the investment, respectively. It also presents the smaller and the medium sized industries with the opportunity of becoming more actively involved in business on the international level. To sum it up th e FDI assists in the internationalisation of small business, harnesses a spirit of cooperation between the different nations and different firms within the nations and overall speeds up the growth and economic development of the participating nations and firms. (Graham Jeffery P. and Spaulding R. Barry, 2005). The Federative Republic of Brazil, geographically situated on the Latin side of America and with a work force of 99.23 million is one of the fastest growing economies in the sphere of developing countries of the world, with an