Apple brand Essay

Apple Inc. uses the Apple brand to compete across several highly competitive markets, including the personal computer industry with its Macintosh line of computers and related software, the consumer electronics industry with products such as the iPod, digital music distribution through its iTunes Music Store, the smart phone market with the Apple iPhone, magazine, book, games and applications publishing via the AppsStore for iPhone and the iPad tablet computing device, and movie and TV content distribution with Apple TV. For marketers, the company is also establishing a very strong presence to rival Google in the advertising market, via its Apps business and iAd network. Steve Jobs, Apple’s co-Founder, described Apple as a â€Å"mobile devices company† – the largest one in the world (Apple’s revenues are bigger than Nokia, Samsung, or Sony’s mobility business). For several years Apple’s product strategy involved creating innovative products and services aligned with a â€Å"digital hub† strategy, whereby Apple Macintosh computer products function as the digital hub for digital devices, including the Apple iPod, personal digital assistants, cellular phones, digital video and still cameras, and other electronic devices. More recently, the full impact of a very well throught out brand strategy has come into focus – and one in which customer experience is central: the Mac is no longer the hub of all things Apple. Now, Apple offers a harmonised, synchronised, and integrated user experience across all of its main devices (iPad, iPhone, and Mac), using iCloud as the hub. It is in the process of extending this experience outside Apple-controled environments by introducing deep integration with Facebook and Twitter on iPad, iPhone and Mac. Apple’s core competence is delivering exceptional experience through superb user interfaces. The company’s product strategy is based around this, with iTunes, the iPhone (with it’s touch screen â€Å"gestures† that are re-used on the iPad), and the Apple Apps store all playing key roles.

Renal System Physiology Physioex

Exercise 9: Renal System Physiology: Activity 3: Renal Response to Altered Blood Pressure Lab ReportPre-lab Quiz ResultsYou scored 25% by answering 1 out of 4 questions correctly. 1. If all other variables are kept constant, how does the afferent arteriole radius affect the rate of glomerular filtration (select all that apply)? Your answer : b. A decreased afferent arteriole radius will increase the rate of glomerular filtration. Correct answer: c. An increased afferent arteriole radius will increase the rate of glomerular filtration. . A decreased afferent arteriole radius will decrease the rate of glomerular filtration. 2. If all other variables are kept constant, how does the efferent arteriole radius affect the rate of glomerular filtration (select all that apply)? Your answer : d. A decreased efferent arteriole radius will decrease the rate of glomerular filtration. Correct answer: a. An increased efferent arteriole radius will decrease the rate of glomerular filtration. b. A decreased efferent arteriole radius will increase the rate of glomerular filtration. 3. If all other variables are kept constant, how does blood pressure affect the rate of glomerular filtration (select all that apply)? Your answer : c. If blood pressure goes down, the rate of glomerular filtration goes up. Correct answer: b. If blood pressure goes up, the rate of glomerular filtration goes up. d. If blood pressure goes down, the rate of glomerular filtration goes down. 4. In the absence of other renal processes (including tubular reabsorption and secretion), more glomerular filtration leads to a larger urine volume.You correctly answered: a. trueExperiment ResultsPredict Question: Predict Question: What will happen to the glomerular capillary pressure rate and glomerular filtration rate if both of these arteriole radii changes are implemented simultaneously with the low blood pressure condition?Your answer : b. Glomerular filtration rate and pressure will rise above baseline values.Stop & Think Questions:If blood pressure were to drop (for example, as the result of blood loss), what changes in the nephron would allow the kidney to maintain ts normal glomerular filtration rate (select all that apply)?Your answer: c. afferent arteriole constrictionCorrect answer: a. afferent arteriole dilation d. efferent arteriole constriction2. Comparing the glomerular filtration rate and glomerular capillary pressure with the baseline values (from the first run), how effective was the increased afferent arteriole radius in compensating for the low blood pressure?Your answer : b. The afferent arteriole dilation improved the low glomerular capillary pressure and filtration rate marginally.Correct answer: c. The afferent arteriole dilation returned the low glomerular capillary pressure and filtration rate almost to baseline values.3. Comparing the glomerular filtration rate and glomerular capillary pressure with the baseline values (from the first run), how effective was the decreased efferent arteriole radius in compensating for the low blood pressure?You correctly answered: b. The efferent arteriole constriction improved the low glomerular capillary pressure and filtration rate marginally.Experiment Data:Post-lab Quiz ResultsYou scored 0% by answering 0 out of 4 questions correctly. 1. If all other variables are kept constant, when blood pressure decreases, glomerular filtrationYour answer: b. remains approximately the same.Correct answer: c. ecreases.2. If afferent arteriole radius decreases in response to an increase in blood pressure, then glomerular filtrationYour answer: a. increases.Correct answer: b. remains approximately the same.3. If all other variables are kept constant, when the efferent arteriole radius decreases, glomerular filtrationYour answer: c. decreases.Correct answer: a. increases.4. With blood pressure held at a constant value, which of the following combinations will raise the glomerular filtration rate above baseline values? Your answer: c. afferent rteriole constriction and efferent arteriole constrictionCorrect answer: b. afferent arteriole dilation and efferent arteriole constrictionReview Sheet Results1. List the several mechanisms you have explored that change the glomerular filtration rate. How does each mechanism specifically alter the glomerular filtration rate?Your answer: Renal mechanisms have effects on water excretion . GFR is large compared to the amount of urine produced. Most water in the filtrate because of renal processes and independent of ADH action2.Describe and explain what happened to the glomerular capillary pressure and glomerular filtration rate when both arteriole radii changes were implemented simultaneously with the low blood pressure condition. How well did the results compare with your prediction?Your answer: The simultaneously implementation of both arteriole rates changing caused glomerular filtration rate and low blood pressure conditions went above the baseline value.3. How could you adjust the afferent or efferent radius to compensate for the effect of reduced blood pressure on the glomerular filtration rate?Your answer: You can co nstrict or dilate them.4. Which arteriole radius adjustment was more effective at compensating for the effect of low blood pressure on the glomerular filtration rate? Explain why you think this difference occurs.Your answer: There was a greater increase of glomerular pressure when afferent radius is increased ra ther than the decrease of the efferent radius.5. In the body, how does a nephron maintain a near-constant glomerular filtration rate despite a constantly fluctuating blood pressure?Your answer: Auto-regulation

Better Business Bureau Essay

In the business world there must be certain checks and balances in place that ensure that the open marketplace maintains its integrity. One of these mechanisms that directly relate to my chosen field of business is a nonprofit organization called the Better Business Bureau. The Better Business Bureau was founded in 1912 and consists of over one-hundred and twenty independently incorporated local organizations throughout the United States and Canada. The purpose of this organization is to ensure that the marketplace remains ethical so that consumers and sellers of consumer goods and services can establish trust. The Better Business Bureau collects data on a particular business’s reliability, alerts the buying public to potential fraud, provides invaluable insight into a business’s ethical business practices, and acts as arbitrators between consumers and business disputes. Companies that meet and maintain the Better Business Bureau’s ethical standards may be invited to obtain membership with the organization. Becoming a member of the Better Business Bureau has the benefit of having an additional selling point to advertise to potential consumers because the Better Business Bureau is revered for honesty and trustworthiness. A high rating from the Better Business Bureau could potentially be the force needed to induce a consumer to purchase your products or services. Companies become members with the Better Business Bureau because the marketplace has more potential to flourish if the consumers trust the businesses that want to serve them. Also, alignment with the Better Business Bureau has the benefit of demonstrating to consumers a business’s commitment to a conducting business in a trustworthy marketplace. Third, members of the Better Business Bureau have the opportunity to network with those in industries similar to their own and attract people from all over the United States. Finally, members get absolute access to any and all of this organization’s services and information. Members get all of the latest news and information about the Better Business Bureau as well as industry specific insider information. As a potential marketer, it would be imperative for someone to recommend that businesses seek to obtain Better Business Bureau membership status.

At Risk Students- Students at risk of school failure with an emphasis Research Paper

At Risk Students- Students at risk of school failure with an emphasis on students placed in foster care - Research Paper Example Such problems necessitate the removal of a child from their home for the purposes of their emotional and physical safety. At any given time, approximately 10,000 children are under foster care, 35% being in the care of their relatives. . How students in foster care become at risk students There are many factors that contribute to students placed in foster care becoming at risk students. These include the frequent school moves which result to disruption of their educational progress. This is mainly because such children are normally forced to leave their communities and schools on entering into foster care due to limited residential resources within the present district of the child. Such transfers force these children to join other students in their new schools despite the disparity in syllabus coverage between the two schools. According to Riley (1986), the impact of school transfers is great because most of such transfers take place mid of the school year and the mobility rates are higher for those entering into foster care for the first time. By the time some of these students go through the curriculum, they could have change schools up to five times. According to a 1996 study done in Chicago Public Schools, students who had changed schools for about four or more times had lost about a year of educational growth by their 6th year. If such student’s do not receive enough attention to orient them to the new school and remedial services to catch up with the rest, they end up lagging behind the rest all the academic years (Pecora et al, 2003). Some of the students under foster care attend to medical appointments or court cases. Such activities usually take the student out of school and could even result to emotional upheaval (Pecora et al, 2003). This means that the student will always have class work or content gaps due to frequent unavoidable absenteeism. This makes these students become at risk students because they may never cope successfully with the rest of the class leading to a general low performance. This causes the student to loose self-confidence leading to a continuation of the trend. Green (1986) notes that students placed under foster care have higher rates of inappropriate behavior like truancy, drug addiction or impulsive behavior. This could be due to lack of proper and continuous monitoring because social workers and care givers may change several times during the stay of a child in foster care. This makes their margin of suspended and/or expelled students wider compared to that of students who are not out of home. A combination of such suspensions and/or expulsions, and inappropriate behavior results to high school failure and drop out rates among them students placed under foster care. Help and support to at risk students At risk students need a lot of help and support from parents, teachers and counselors in order to enhance their educational levels and achievements. As noted earlier, these students experience more failure than the rest of the class and hence they fall behind their peers. This causes them to have low self-esteem which negatively affects their attitude towards education and to underestimate their potentialities. Beveridge (2010) states that the 2001 No Child Left Behind Act (NCLB), supports educational reforms that are standards-based. This is based on a belief that establishment of goals and setting of high standards can improve the educational outcomes

Motorola Inc. in China Case Study Example | Topics and Well Written Essays - 2000 words

Motorola Inc. in China - Case Study Example There is an increase in manufacturing activities which have further led to an increase in demand for skilled labour and advanced technology. This has also resulted in mergers, acquisitions, exploration of new consumer markets and search for better supply chain partners." (Berger, 2000). Precisely put, this is the wave of globalization that every company, big or small, wishes to ride in its lifetime. On the verge of sinful exaggeration, I risk to comment that the phenomenon of globalization has made and ruined the fortune of many companies. The story of Motorola is a story of effort, clairvoyance and survival. A company with very humble beginnings, the Illinois giant went global as early as 1960's when the concept of globalization was itself in rudimentary stages. With each passing year, the company scaled new heights in the field of consumer electronics, semiconductors, wireless devices and other related domains. Originally christened as Galvin Electronics, today's Motorola Inc. was founded by Paul.V.Galvin in Schaumburg, Illinois, USA, in the year 1928. Its first line of business was . from thence it migrated into other areas and created a series of firsts which changed the way the people over the way communicate. The two-way radio service, the first pager service, cellular handsets, the six sigma theory, GPRS etc., to name a few. Interestingly, Motorola's journey has also been one of frequent investments and divestitures, which largely remains unparalleled. It progressed the most under the leadership of Robert Galvin and by the 1980s, it became a world leader in chip, modem, cable and wireless technology. It merged with General Instrument Corporation in the 1990 and proposed the development of first HDTV technical standard. By 2001, the company had a worldwide sales of US 30bn and by 2007 it crossed the $100bn mark. Motorola- The Chinese Affinity China has always been the cynosure of the eyes of global investors and Motorola Inc is no exception to this. It forayed into the Chinese territory in 1987 and set up its first office there in Beijing. Buoyed by the response and initial success, it set up Motorola China Electronics at Tianjin in 1992. Then, it mainly limited its production activities to products such as two-way radios, mobile phones, automobile electronics, semiconductor, cell phones and pagers. When Tango, was launched in 1995, it

Short story analysis Essay Example | Topics and Well Written Essays - 750 words

Short story analysis - Essay Example The Black Cat, after its diabolical murder, is resurrected and is hungry for vengeance and destroys the narrator psychologically. Stunning insanity Cat symbolizes misfortune as per Western traditions. Black cat in the story of Edgar Poe is the cause of double misfortune, when it lives and on its death. Cat’s mysterious gaze has the guile and is the pointer to uncertainties and in Celtic lore they are considered evil and sacrificial animals. They have the ability to see at night (darkness) which represents negativities and thus they are part of the underworld. Symbolically the veil of night shifts one’s perception of reality. The story highlights the effect of stunning insanity. The narrator tells how sanity turns to madness, the reason being obsession with the black cat. Evil has seized him; cruelty to animals becomes his way of life and finally drives him to take the life of his wife and the subsequent sin of trying to conceal her death. That he is alcoholic makes the characterization even more diabolic. Pluto, God of the underworld. Symbolically, the Black Cat is Pluto, the Roman God of the underworld. Pluto controls the hell and symbolizes the devil. ... The narrator’s action in gorging out the eye of his pet animal, the black cat, is mind-boggling. It amounts to torture of the ultimate level. To conceal his guilt, the narrator commits another senseless act. He hangs the cat in the backyard but the evil strikes back. The cat resurrects and itches for revenge, the narrator’s house is on fire and burns to the ground and he observes the image of a large black cat originating through the fire on the only wall that was still intact. He can still see the rope tied to its neck. After the fire, the narrator sees a black cat resembling Pluto, in a bar and takes it home. He observes next morning that the second cat is without one eye, which reminds him of his dark deeds. Conclusion The narrator does not lead the readers on a wild goose chase and is sane enough to understand the reactions of the readers for his insane acts. The details given in the story are not by a dreamer, but the one who knows the consequences of his ill-bodin g quests. He does not expect sympathy or rejection by the readers and his intentions about story-telling are deliberate. His psyche drives him to the point of insanity and at that stage he just cannot help acting diabolically. He expects them to think about the unthinkable and believe the unbelievable and respect the

Health history and discharge. (Alterations in Pulmonary and Kidney Essay

Health history and discharge. (Alterations in Pulmonary and Kidney Function) - Essay Example This has caused her health to decline significantly as evidence by her steep loss of weight within a short time. Though Sallie has most of the medicine she is required to take. The visit revealed that she was missing crucial medicine which she only got some time back. As this medicine was also crucial for her recovery, the absence of it could show why her state of health was deteriorating over time. Sallie lacks somebody to take care of her at home. To ensure she eats well and takes her medication as and when it is to be taken. Her daughter works long hours so is unable to do this. This problem is evidenced by her missing some important medication that she ought to have had from the beginning. Sallie is lonely in her house where she lives alone, her daughter, Thelma Jean is a full-time employee in town and rarely visits. She also misses her late husband who she describes as a jolly man who used to love and make her

Forensic Anthropology Essay Example | Topics and Well Written Essays - 2000 words

Forensic Anthropology - Essay Example Having understood the two, it is then necessary to draw a link between the two or evaluate all the possible relationships between the two. It will also be imperative to reckon that a marriage between the two possible brings forth what is commonly termed as forensic anthropology. This paper seeks to show how biological anthropologist assist with a forensic investigation besides identification of individuals. The paper starts first by understanding what forensic is, then moves on to define anthropology and forensic anthropology then shows how anthropology can aid in forensics. The term forensic refers to the application of scientific knowledge in a bid to solve legal problems and enable the smooth running of legal proceedings (Bartol, 2004: p8). As such, any profession that uses scientific knowledge aids bin forensics and this explains the existence of such terms as forensic anthropology, forensic medicine, forensic science, forensic experts etc. Forensic comes from a Latin word "forensic" which means relating to a forum and forum in this case which according to the ancient Rome was a market place where people congregated to conduct all sorts of business as well as public affairs. As time went on, the term forensic was limited to reference of the courts of law thus entering English use in 1659 with that very meaning. Therefore, forensic refers to law problems or issues which are solved by the application of scientific knowledge. The word anthrop... Human beings and their ancestors are studied in terms of the physical characteristics, social and environmental relations and culture. Main concern of anthropology is the origin of the present homosapien's, ancestors, evolutionary development etc. As such, anthropologists study the skeletons, DNA, tools, etc of the modern man's ancestors to locate the origin of the present day behaviours and culture. Thus, the common questions asked by the anthropologists include but are not limited to: 1 What defines human beings 2 Who are the ancestors of modern human beings 3 What are the human physical traits 4 How do human beings behave 5 Why the differences and variations among the human beings 6 How has the evolutionary past human beings influenced both the culture and social organization These are just but examples of questions asked by anthropologists and have been used to offer a rough estimation of the scope of anthropology. The modern anthropology borrows extensively from both the humanities and natural sciences such as biology and chemistry. The modern anthropologists have specialized in technical subfields which have found wider applications both within and without the scope of anthropology. What is Forensic Anthropology Basically, forensic anthropology is the application of anthropology in forensics. It is simply the marriage between anthropology and forensics. Generally, forensic anthropology is the assessment of the skeletal remains of human beings on behalf of the law enforcers in a bid to establish the identity of the bones (Klepinger, 2006: p3). Anthropology is wide and is divided into linguistic anthropology, cultural anthropology, archaeology and physical anthropology. Of great help to forensic is the physical

A Critical Assessment of an Agency or Funding Regime that promotes Essay - 1

A Critical Assessment of an Agency or Funding Regime that promotes physical regeneration - Essay Example ese agencies and their functioning toward the uplift of the regional economy, it would be interesting to study and understand what urban regeneration is all about and how it evolved. Urban areas are essentially dynamic in nature. Socio-economic factors, environmental and physical factors all interplay and interact together to generate changes in their structures. Moreover, an urban area experiences thrusts from outside which necessitates adaptation to changes while internal dynamics and pressure try to withstand such changes or accept those resulting in either prosperity or decline. Though each problem may not be unique to a specific rural area, yet each challenge requires a distinctive approach towards the generation and implementation of its solution. Since the beginning, urban areas have always performed a variety of functions, offering shelter, providing infrastructure and opportunities for trade and commerce and opportunities for social interaction, being a few of those. As time passed, the importance of each need changed necessitating the requirement for new infrastructure, more space, more facilities for business etc. These changes in the physical structure and functioning of a town and its social life are inevitable since the town has to reorganise itself to meet the changing demands. These changes are also beneficial in a somewhat indirect way since these changes also make fresh demands for improvement of infrastructure and facilities so that the community within an urban area is forced to adjust itself to the new demands and work towards providing better opportunities for growth and progress. The relation between social deprivation and meagre physical infrastructure and facilities had long been an accepted fact and legislations and policies were implemented for improved infrastructure for health and better living conditions. It was gradually realised that merely improving health and living conditions will not contribute significantly towards the

Time Warner Beta Essay Example for Free

Time Warner Beta Essay Introduction – Definition of Beta Beta, which is represented by the Greek symbol, is also denoted as the Beta Coefficient and is identified as the slope of the linear regression of the portfolio in which within a specific period or point served as benchmark. (Risk Management,) Beta is the assessment of the market risk or ‘volatility’ of the stock. With this, it may help investors to make the right decisions when investing stocks because of some fluctuations in price of the stocks. (Beta: Gauging Price Fluctuations, July 29, 2005) Volatility which is the measure of the uncertainty or risks accompanied in investing due to fluctuation of the prices is determined its relativity by approximating its Beta. Volatility is associated with security’s value which means that when the investment is said to having a higher volatility, there is a bigger potential of security’s value for expansion over a larger range. Thus implying that within a shorter period of time, price of the security can vary significantly. On the contrary, a lower volatility insinuates that the fluctuation in security’s value is unnoticeable; however there are small alterations of the value within a stable range of time. (Volatility,) With that, Beta being the measurement of volatility, it offers meaningful significance to the market risk compared to the greater market. Furthermore, Beta is used for comparison along with the other stock, estimating the overall volatility of the return of the security in contradiction of the return in the market. Computation of Beta ÃŽ ²   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   In investment and finance, Beta is the connection or the coefficient of a portfolio or an individual stock in contrast to the market all together. So as to compute for the beta, the regression analysis is used. The Beta of an asset is calculated using the formula: where in, ra is the gauge of yield profit of the asset; and rp is the evaluation of the rate of the yield profit of the portfolio of which the asset is a component. (Beta Coefficient,) Furthermore, the cost equity of a company can be projected using the Capital Asset Pricing Model in which the operation of equity beta of the company and again, equity beta is the operation of both the weight and asset risk. This is calculated using the formula: where in, KE is the cost of equity of the company, RF is the rate of return on a risk free investment also known as the risk-free rate, RM is the market portfolio return, and ÃŽ ²E is the equity beta which is computed: which is derived from this formula: , and the formula of a Firm Value (V) Firm Value (V) = Debt Value (D) + Equity Value (E)(Beta Coefficient,)   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Applying this entire concept in chosen business which is the Time Warner, the world’s largest media company, had beta of greater than 1 which indicates that the price of security will be more volatile than the market. This means that the investors accept the additional risk accompanied to attain the possibility of more rewards. The Time Warner had a fixed exchange rate during their merger with the AOL. The conditions contain include the 1.5 shares of AOL Time Warner would be given to the Time Warner for each share their stock and America Online shareholders will get one share of AOL Time Warner stock for every share of stocks that the America Online owns.(Dignan, 10 Jan 2000 ) Using the Charts in Beta, investors could observe the fluctuations and changes in the charts, its opening, closing prices and the high and low points in a specific period of time (Time Warner Inc.,). References Beta Coefficient [Electronic Version]. Retrieved May 23, 2007 from http://www.answers.com/Beta. Beta: Gauging Price Fluctuations [Electronic (July 29, 2005). Version]. Retrieved May 23, 2007 from http://www.investopedia.com/articles/01/102401.asp. Dignan, L. (10 Jan 2000 ). AOL, Time Warner tout broadband future, synergy [Electronic Version]. Retrieved May 23, 2007 from http://news.zdnet.co.uk/itmanagement/0,1000000308,2076198,00.htm. Risk Management [Electronic Version]. Retrieved May 22, 2007 from http://www.tradetrek.com/Education/risk_management.asp. Time Warner Inc. [Electronic Version]. Retrieved May 24, 2007 from http://finance.yahoo.com/charts#chart1:symbol=twx;range=1d;indicator=volume;charttype=line;crosshair=on;logscale=on;source=undefined. Volatility [Electronic Version]. Retrieved May 23, 2007 from http://www.answers.com/volatility.

Strategic Management Case Analysis Of Airtran Airways

Strategic Management Case Analysis Of Airtran Airways This case analysis examines the impacts AirTran Airways has on the airline industry with respect to its competitors. AirTran Airways is an airline company that provides domestic flights (U.S.) to travelers flying in the United States. AirTran also became the first airline to offer Wi-Fi to its travelers. AirTran is the successor of its predecessor ValuJet Airlines that was founded in 1993 in Atlanta, Georgia. AirTran, better known as ValuJet Airlines in the mid 1990s, grew economically stable because of its low airfare prices. In 1995 and 1996 however, ValuJet also obtained the highest number of air-travel accidents than any other airline company. One example was the famous crash of Flight 592 in 1996 that killed 110 people in Florida when the plane crashed into the Florida Everglades (river). After the accident and further investigation by the Federal Aviation Administration (FAA), the crash had resulted from several safety violations of ValuJet aircrafts. These violations also led the FAA to ground ValuJet Airlines. In order words, any new aircrafts purchased by ValuJet had to be approved by the FAA to determine the safety level and compliance to the FAA standards for aircrafts. In 1997, ValuJet was experiencing financial hardships and was on the road to bankruptcy. As a result, ValuJet partnered with AirTran Holdings and move their operations from Atlanta, Georgia to Orlando, Florida. A short time after the merger of AirTran and ValuJet, ValuJet decided to remove its name from the merger, letting AirTran Holdings obtain control of the entire merger. As of September 2010, AirTran Airways (AirTran Holdings) has experienced financial hardships since the 2008 world-wide recession. As a result, AirTran made an agreement for Southwest Airlines to purchase the low-fare airline since AirTran was on the road again to bankruptcy. The information constructed and used for this case analysis pertains to proposed vision and mission statements for AirTran, internal and external audits of AirTran, types of strategies, and a conclusion that will determine what AirTrans next plan of action should be. Vision Statement Actual: Proposed AirTran has NO actual vision statement. AirTrans vision is to be recognized and become the leading competitor in the airline industry with affordable airfares, a safe environment, and excellent customer service. Mission Statement Actual: Proposed Innovative people dedicated to delivering the best flying experience to smart travelers. Every day. (AirTran, 2008). Our mission is to supply safety and affordable flights to our travelers including our employees in the airline industry. We are committed to being honest and loyal to our travelers while providing a fun and safe environment for our crew members and our customers. We are focusing more on technology including offering Wi-Fi satellite radio to our traveling customers. AirTran is also focused on teamwork and taking pride in everything we accomplish because communication among our crew members is the key for success here at AirTran. Discussion and Analysis of Mission/Vision Statements In judging the actual vision and mission statements of AirTran, the proposed statements give a better insight on what AirTran is about. AirTrans vision does not answer the question of what we want to become, because a vision statement for AirTran do not exist (David, 2011). Instead, a proposed vision was created in order to fill the void of a missing vision statement. The vision statement is the most important statement because it defines what the company plans to do and it is the foundation of defining the mission statement. AirTrans actual mission statement does not clearly answer what AirTran is about. For example, AirTrans current mission statement only states what the employees goal is about, which is providing the best flying experience to smart travelers. It does not satisfy the mission statement components including customers, technology, concern for employees, or a philosophy the company can follow. The actual mission does not build a foundation for strategies, plans, and priorities for AirTran. In the proposed mission statement however, the mission includes customers, the services AirTran offers, the markets, technology and concern for employees. The proposed philosophy of AirTran is: communication among our crew members is the key for success here at AirTran (David, 2011). Discussion and Analysis An EFE matrix is a tool that is used by companies to determine and study economic, demographic, political, technological, competitive, etc. factors outside of its company (David, 2011). The unemployment factor under opportunities received the highest weight because it unemployment increases, more people will drive vehicles and travel less by plane to save gas and money. Currently, the unemployment rate is 9.2% in the US (U.S. Bureau of Labor Statistics, 2010). If the unemployment rate decreases, more people are likely to travel by airplanes, especially if the airfare cost is low and demand for air travel is high (Travel Agent Central, 2010). Another major opportunity is that one of AirTran competitors Mexicana de Aviacià ³n ceased operations in the United States and Mexico. The use of wireless technology and Wi-Fi is another opportunity that could attract potential travelers who dont have access to the internet when traveling on other Airline company planes. The largest threat to AirTran is the increased competition from Delta and Southwest Airlines. The increased competition factor received the highest weight because the most important factor that affects another business is the competition from its competitors. Another threat to AirTran is that its highly dependent on the fluctuations of fuel costs. Since fuel is one of the largest costs to AirTran a slight adjustment can mean the difference between a loss and a profit. Along of fuel, labor costs are one of the largest costs to AirTran and a slight adjust can mean the difference between a loss and a profit. Political policies enforced by the US and other countries in which AirTran operates can have a huge impact on the company as a whole. With terrorism a top priority of the government, new policies can cause a huge burden on AirTran for new technologies or more labor costs (security and maintenance). As with any business, labor strikes can halt a companys operations causing the company to lose millions in revenue. Labor strikes received a rating of 4 because it is a threat that could cause AirTran to be driven out of business. AirTran is performing average in their external environment. Most of AirTrans opportunities and threats need to be addressed more aggressively, such as decreasing operating costs, expanding internationally, and increased competition (David, 2011). Competitive Profile Matrix Discussion and Analysis A Competitive profile matrix for a business helps them determine major competitors weakness and strengths in their strategies (David, 2011). AirTran has the highest weighted score because AirTran has an advantage in charter services, business class services, and the navigation of their website. Based on the research found, the lowest fare costs ranked from AirTran being the lowest to Southwest Airlines being the highest and Delta Airlines falling between the two. AirTran received a rating of 4 under technological advances because it was the first airline company to introduce and provide Wi-Fi to travelers and customers. AirTran however, received a rating of 2 for both the market share and the financial position because AirTran is becoming bankrupt, in which AirTran was just bought out by Southwest Airlines. Airfare costs and market share are weighted heavily because if a companys airfare costs are too high, many customers will reject the idea of buying airfare tickets. Charging too l ow for airfare tickets would attract more customers, but would decrease the market share since the company would be losing profits while selling at a low price. Discussion and Analysis An IFE Matrix is a tool that summarized the major strengths and weakness for many companies based on the functional areas of that business (David, 2011). Being the first airline company to provide Wi-Fi Internet to travelers is classified as minor strength because it provides an opportunity for travelers to surf the web or complete business objectives. AirTran also has a 1st place ranking in overall air quality from the Airline Quality Report of 2008 (AirTran Airways, 2008). Having rewards for frequent flyers encourages their frequent flyers to be a committed customer. AirTran includes their $1 billion annual revenue, which helps their airline purchases better equipped airplanes. Also, AirTrans high number of daily flights helps their revenue while increasing their safety rating from by riding passengers to their destination safely. Lastly, their low cost structure encourages more customers which will result in an increase of their profit revenue. Having customer complaints and a decrease in stock prices can result in negative effects. A weakness is a negative strategy of a business that has negative impacts upon that particular business (David, 2011). These are a few weaknesses that AirTran currently possess, which could cost them thousands of potential customers.. Another weakness of AirTran includes spending more money for maintenance equipments, which resulted in a net loss, which can also affect the liquidity of the business. High labor costs also have a negative impact on AirTran because it decreases net income. Key Financial Ratios: (in thousands) Discussion and Analysis The financial ratios above are based off the 2009 balance sheet and income statement data from AirTrans annual report. Financial ratios are statistical data that analysts use based on the companys balance sheet and income statement for that fiscal year (David, 2011). Liquidity ratios help measure a firms capacity of meeting short-term obligations. Leverage ratios help determines how much a firm is in debt. Activity ratios describe how well a firm is allocating its resources effectively. Profitability ratios help determines the overall effectiveness of management based on the firms investments and sales. Growth Ratios help determine the firms ability to remain liquid during the growth of both the economy and the industry (David, 2011). Strategy Analysis SWOT Strategy Matrix: Strengths Financial stability Global presence Brand recognition Low cost air fares Weaknesses Speed of customer service High rate of accidents involving AirTran planes Quality of airline services Opportunities Possible company expansion with Southwest Airlines. Possible gain of new fleet Increase in profits Expanding AirTran into foreign countries. SO Strategies Utilize brand recognition by expanding operations and partnering with Southwest Airlines (S3, O1). Increase global presence by expanding operations into foreign countries such as Mexico, Canada, and the Middle East (S2, O4) WO Strategies Eliminate high percentage of airplane accidents by acquiring new fleet that uses efficient technology to decreases the risk of accidents (W2, O2). Improve the quality of airline and customer service with new methods such as customer surveys, questionnaires, and joining forces with their major competitor to improve quality (W3, O1) Threats 1. Stronger Competition from competitors 2. Rising Labor Costs 3. Anti-terrorism policies and laws 4. Economic conditions ST Strategies Sustain financial stability by monitoring expenses and changes with the competition (S1, T1) Maintain low air fares and maximum profits by monitoring the economic condition for the airline industry (S4, T4) Eliminate retrenchment by expanding operations globally (S2, T4) WT Strategies Establish a positive public image regarding the high rate of accidents to avoid criticism from people who are affected by post 9/11 laws and policies (W2, T3) Focus on improving customer services to help combat against other airline competitions customer service (W1, T1) Improve the quality of airline services by monitoring the competition that has a stronger competitive advantage (S3, T1) Discussion and Analysis The SWOT (Strengths-Weaknesses-Opportunities-Threats) matrix is an important type of framework used by companies to develop four types of strategies based on SO (strengths-opportunities), ST (strengths-threats), WO (weaknesses-opportunities), and WT (weaknesses-threats) (David, 2011). SO strategies are based upon the companys internal strengths, which are used to capitalize upon the external opportunities outside that company. An SO strategy for AirTran would include using their brand recognition of low costs to expand their operations globally. ST strategies results from a companys strengths thats used to help eliminate or condense external threats. An ST strategy for AirTran would include monitoring their expenses and economic conditions to maintain financial stability. WO strategies are used to help capitalize on opportunities by improving the companys internal weaknesses. For example, AirTran has a high number of plane crashes, which is a major internal weakness. A WO strategy fo r AirTran would be to acquire new technology advanced fleet and aircrafts to eliminate the high number of airplane accidents. A WT strategy is used to help a company not only avoid external threats, but to help improve internal weaknesses also. A WT strategy for AirTran may include focusing on better customer service to gain potential customers from its competition (David, 2011). The SPACE Matrix for AirTran Airways INTERNAL STRATEGIC POSITION EXTERNAL STRATEGIC POSITION Financial Position (FP) Stability Position (SP) Technological changes Rate of Inflation Competitive pressure Price elasticity of demand Price range of competing products Financial Leverage Liquidity Inventory Turnover Return on investment Cash Flows Earnings per share Competitive Position (CP) Industry Position (IP) Growth potential Profit Potential Financial Stability Resource Utilization Ease of entry into market Market share Product quality Product life cycle Customer loyalty Technological know-how Discussion and Analysis A space matrix is a type of framework that companies use to designate which type of strategies should be pursued, whether those strategies are aggressive, competitive, defensive, or conservative (David, 2011). An aggressive strategy demonstrates that a company has great financial strength in that specific industry for that company while a conservative strategy indicates that the status of a company (positive or negative) in a industry thats decreasing in growth and sales. A competitive strategy demonstrates that a company has major competitive advantage(s) in either a high-growing or low-growing industry. Companies categorized under a defensive strategy indicate that a company has competitive disadvantages in a low-growing industry. AirTran is currently taking a defensive position in the airline industry because AirTran has a weak competitive position in an industry thats becoming more unstable as time progresses (David, 2011). The value assigned to the financial position is a 2 beca use of AirTrans financial struggle to remain liquid as a business. AirTran received a -6 under the stability position since competitive pressure is high and the high risk involved for AirTran. The Industry position received a score of 4 because AirTran has the potential to grow, but at the same time, the financial stability of AirTran is relatively weak. The competitive position received a -5 because of the low market share and control AirTran has over its competition (David, 2011). The Internal-External Matrix Discussion and Analysis An Internal-External Matrix is a tool that companies use by dividing their divisions into nine cells and basing the data from the IFE and EFE weighted scores (David, 2011). The grow and build section received a medium score because the EFE weighted score for AirTran fell around 2.68. Since it has a medium score of 2.68, it would also be classified as an average internal position. The IFE weighted score for AirTran fell around 2.70, which is also classified as an average internal position with a medium score (David, 2011). Since AirTran is struggling financially, the harvest and divest area received an average score also with the grow and build section being in the low quadrant score. The Grand Strategy Matrix Discussion and Analysis A grand strategy matrix is a tool that analysts use in order to formulate alternative strategies for that business. There are four quadrants that represents whether a firm is classified in a competitive or market position based on the growth of the market (David, 2011). AirTran would be classified under quadrant III because the airline industry has slowed in growth and AirTran is on the verge of bankruptcy. AirTran needs to make changes quickly; however, due to the lack of financial support, Southwest Airlines has bought AirTran Airways from the owner of the company. Since all the other options have failed for AirTran, selling its business to another competitor is the only way to suppress bankruptcy (Schlangenstein, 2010). QPSM for AirTran The Quantitative Strategic Planning Matrix QSPM Strategic Alternatives For AirTran Airways Discussion and Analysis The QSPM (Quantitative Strategic Planning Matrix) is a type of framework thats used by companies to determine the comparative attractiveness of alternative strategies (David, 2011). These new strategies are based upon the previous strategies formulated from the SWOT matrix. The key factors of the QSPM are generated from the EFE, IFE, and the competitive profile matrix strategies. The alternative strategies formulated are based on what the company should consider implementing. In other words, AirTran decides to use product development as an alternative strategy. The alternative strategy involved intends to increase sales by creating an express lane for customers to quickly purchase airfare tickets. Some of the key factors involved for the new express lane strategy include an increase in Floridas population, while studying the weakness of increased customer complaints. An attractiveness score is formulated based upon how well the alternative strategy can improve the key factors, whether its an opportunity, threat, strength, or weakness. For the express lane alternative strategy, an attractiveness score of 2 for the increased population of Florida factor indicates that the idea is somewhat attractive. On the other hand, one of AirTrans competitors Mexicana de Aviacià ³n ceased operations and received an attractiveness score of 4 because AirTran can capitalize o n this opportunity by gaining more potential customers (David, 2011). Evaluation of AirTran worth analysis: AirTran Worth Analysis **In Thousands (2009) 1. Determine Net Worth or Stockholders Equity Sum of Common Stock, Additional Paid-in Capital, and Retained Earnings (in thousands) Discussion and Analysis In evaluating AirTrans worth, the worth can be categories into what AirTran owns, what AirTran has earned, and what AirTran can bring to the airline industry. The net worth of AirTran is approximately $525,740 (in thousands). The net worth includes common stock, paid-in capital, and AirTrans retained earnings (David, 2011). The price-earnings ratio for AirTran is a (-$525.81 thousand), which is a negative earnings per share because of AirTrans low stock prices. The current enterprise value of AirTran, according to yahoo.com is around 1.60 billion dollars. In other words, if Southwest Airlines decides to buy AirTran as Southwest have already done, Southwest would more than likely pay around 1.60 billion dollars (AirTran Holdings, 2009). Recommendations: Specific strategies and long term objectives that would benefit AirTran would include expanding its operations internationally to countries such as Europe, Asia, and Africa due to the high population, especially China. Chinas economy is currently on the rise and AirTran moving its operations to China could greatly benefit the company. With nearly 1 billion people in China, if only 10% of the people buy airfares from AirTran at $50 each, thats 100 million people per $50 ticket, which would equal to around $5 billion, 5 times the annual revenue. Moving from a domestically controlled environment to an international control environment is beneficial also because it will provide the US citizens an inexpensive opportunity to travel to foreign counties. The estimated time for expanding AirTrans operations should take no more than 1 year, if not before. New policies that should be implemented for AirTrans foreign operations would include outsourcing employees such as the employees that live in the country thats holding AirTrans operations. For example, if AirTran expands to China, then it is only logical that AirTran should only hire individuals from China and neighboring areas to run the operations. If AirTran however continues to experience financial instability, AirTran should sell all of its assets for their intangible worth, which would be classified as liquidation (David, 2011). Discussion and Analysis A projected income statement allows an organization to predicted expected results based on particular actions and approaches (David, 2011). Based on the above income statement, it is projected that AirTran will decrease in total revenue by about 50% because of the recent drop in sales and net income. Since AirTran also has negative retained earnings, it is only reasonable that the total revenue will decrease by a percentage. Since total revenue directly affects gross profit, the gross profit is projected to fall about 75% in the year 2010, based off 2009 financial data. Operating expenses are predicted to increase by 10% because of the decrease in profits and possible increase in expenses. Based off the projections, it is projected that the net income will also decrease by about 50% because of the decrease in revenues and gross profit. Discussion and Analysis A projected balance sheet is a financial statement that allows an organization to predict future total assets and project total liabilities based off the income statement (David, 2011). Since the revenue decreased on the income statement, the cash of the balance sheet would decrease around 9% since cash is created from total revenues. Inventory will decrease by 8% because AirTran will not buy as many aircrafts for their airline company due to the recent drop in net income and increased expenses. As a result, the total assets would decrease by 9.8 percent due to the decrease of inventory, cash, and other contra-asset accounts. The liabilities are project to remain about the same with exception to the long term debt. Since AirTran is losing money, they are not likely to purchase any new aircrafts that may require them to take out a loan. The long-term debt account is projected to decrease by 25% because of the decreased reliability of taking out a loan for inventory purchases. Common s tock under owners equity will remain the same since the number of shares outstanding will not change from its previous value of 135,000. Since the retained earnings are currently at a negative value, a prediction of an addition of negative $6,000 is projected for the retained earnings account. In addition, the total assets and total liabilities/stockholders equity match, so the projected balance sheet is complete for 2010 (David, 2011). Discussion and Analysis The financial ratios above are based off the 2010 projected balance sheet and projected income statement data for AirTran. Financial ratios are statistical data that analysts use based on the companys balance sheet and income statement for that fiscal year (David, 2011). The liquidity ratios for AirTran describe how well AirTran can meet short term liabilities. Both the current and quick ratios have a calculation of 1.02 based off the projected financial statements. The leverage ratios, which measure how much a firm is financial by debt include debt to total-asset ratio and debt to equity ratio. The debt to total-asset ratio has a calculation of 0.78, which indicates that AirTrans total assets is about 22% higher than AirTrans total debt. Activity ratios demonstrate how well AirTran is using its resources. The fixed assets turnover has a ratio of 1.00 exactly, indicating that AirTran is effectively using its resources and equipment utilization. The profitability ratios will measure A irTrans overall effectiveness based on sales and investments. The net profit margin has a ratio of 6% indicating that after taxes, per dollar of sales, AirTran will receive a 6% profit. The growth ratios measure how well AirTran can growth depending on its economic positioning. Based on the net income data, net income has a ratio of about 50% because of the increase of net income from $67,331 to $134,662 in 2008 and 2009 respectfully. Discussion and Analysis A balance scorecard is a type of framework that companies use for evaluation of objectives such as financial performance and customer knowledge (David, 2011). The expected financial and nonfinancial objectives recommended for AirTran include customer service/loyalty, revenue growth, and quality of customer service. The desired measure for the customer objectives include customer feedback and rewards such as giving customers questionnaires to answer and provide an A+ reward to frequent travelers. The time expected to implement the customer objective will take around 1 month to complete. The desired measure for the financial objectives includes the changes in finances such as net income and stockholders equity. The estimated time to implement the financial objectives may take up to 6 months or a year because of the financial instability AirTran is currently experiencing. The operations/processes objective has a desired measure of a scale rating from A to F. The higher the letter grade, the better AirTran will look to potential customers, creditors, and investors (David, 2011). Conclusion: AirTrans future plan is to sell its company to Southwest Airlines instead of shutting down its operations. Although AirTran will no longer be operated as AirTran Holdings, the owner feels that this is an opportunity for AirTran to become an even greater entity. AirTran could have possibly rethought the situation of selling its assets to Southwest Airlines and formed an alternative strategy. The alternative strategy could have been to expand its operations to foreign countries that will create opportunities to reach a new variety and number of people. However, it appears now that Southwest Airlines is back to the top as being one of the most dominant airline companies to exist today.

FDI Policies of India and China

FDI Policies of India and China Chapter 1: Introduction 1.1. Overview Foreign Direct Investment is a hot topic in most policy circles as it is associated in many instances with significant macroeconomic changes and improvements in the range of goods and services produced in recipient countries. Furthermore growth in recipient countries is often ascribed to these inflows and so competition for higher inflows of FDI has become competitive. Most of the developing and developed countries increase their economy by enhancing their share in the global market through FDI inflows. As FDI shows more impact on the countrys economy, most of the foreigners are investing their amount in other countries for improving their profits with less manpower and minimum initial cost. These inflows were easily achieved by the investors by just fulfilling their basic requirements and maintaining their policies. FDI can be used by the countries only when they meet some of the major requirements like transfer of capital, a source of funds for foreign operations, Control investmen t and a balance of payments flow (Nicolas, B., 2010). Even though the FDI inflows in developing countries are low that is nearly 5%, this shows more impact on the economy in terms of the development programs by introducing new technologies. This change will be occurred only in the surroundings of investment areas. Here, in this research the FDI inflows between India and China are studied by comparing both the countries. Further of this study clearly explains the various aspects that are considered by the India and China for increasing the FDI inflows in the global market and also illustrates the policies that are followed by China as most of the investors prefer China when compare to the India. Finally, it recommends some of the policies and the changes that need to be made by the Indian Government for improving its FDI inflows. 1.2. Aim and Objectives Aim: To study the variations between the FDI policies of Indian and China based on their inflows and overall performance of the economy. Objectives: To study the importance of FDI and the required fundamental policies for acquiring the FDI. To research on the impact of FDI inflows in India and China based on their overall performance. Identifying the possible steps for Indian policy makers for improving their FDI inflows. Statistically evaluating the comparison between India and China in terms of FDI inflows. 1.3. Purpose of Study This study mainly focuses on the Foreign Direct Investment, the role of FDI in India and China and also illustrates the comparison between these two countries in terms of FDI. This research is selected in order to know more about the investments made by the developing countries and the involvement in international financial banking markets to influence the global and political aspects. This study is mostly useful for the people who are willing to know about the role played by FDI in the fast growing countries like India and China where these two countries differs in their environmental conditions. While researching about the FDI in both countries, one can easily analyze that China is showing more interest in attracting the FDI and is leading their economy when compare to India. So in order to clearly investigate on this point, this study also focuses on the aspects and the policies that need to be designed by the Indian country for attracting the investors and also to increase the ov erall performance of the economy by raising the inflows when compared to China. 1.4. Research Context In this study the researcher is focused on the worlds largest two most populated countries: India and China with a greatest history background. These two countries are known to be fast growing countries in the world and are known for their ample facilities and environmental conditions. These two countries are economically improving their standards in terms of technology and infrastructural growth. However, China is considered to be more positive in terms of attracting FDIs and are almost leading the comparison with India. In this research the time is a biggest constrain and to understand the research physically is really a tough target for the researcher by visiting both countries to meet and interview/ survey the financial organizations experts from various locations. However it is also noticed that in India only the FDI policies are changing from place to place based on the local governments rules and regulations. All the major rules and regulations governed by RBI and Government o f India are applicable, addition to that the investing company also needs to ensure that the environmental and ethical issues are not disturbed by the foreign investors in local and urban areas of various parts of India. As an example, there are some pilgrim places of India which does not allow non vegetarian food or related items so in that circumstance neither Government of India or RBI cannot allow the foreigners to invest their amount for a restaurant or bar and etc. Similarly in China it is one of the largest countries in the world and is having different cultures and backgrounds with in the country. Hence from the above context it is understood that this research will mainly focus on the secondary data available and in some areas it can get into the help of people related to the financial and banking industry. 1.5. Research Methodology For conducting any type of research, the data needs to be gathered by the researcher where this collected information should be in such a way that it is valid and accurate. Researcher need to choose a suitable method from various research methods, by which the researcher can successfully finish the research. Generally there exist two different types, primary data and secondary data. Primary data mainly focus on the aim of the research where the researcher can easily collects the information from various methods like surveys, interviews, etc. Where as in the secondary data, the researcher can collect the data only from the sources like journals, books, magazines, online articles, etc. where the researcher need to collect the accurate data as these recourses will not focus on the aim of research (Kumar, R., 2005). Here in this research, researcher collects the information through secondary data as the main aim of this research is to compare the FDI inflows in both India and China. As t he time is the biggest constrain, it will be really tough target for the researcher to select the primary data as the researcher either need to do interview /survey with the concern persons by visiting two countries where it cannot be possible with the period of time. So, its better to prefer secondary data for gathering accurate information for the research by referring various resources. Hence, the research can be successfully completed by analyzing the collected information and drawing the conclusion from this data. Chapter 2: Literature review 2.1. Overview This chapter will provide the suitable information and required material for completing research successfully with no issues during the research process. At the same time the literature review gives a basic idea about the research problem solving background with additional material from their related background history. The growth of multinational enterprise (MNE) activity in foreign direct investment (FDI) has grown at a faster rate than most other international transactions as well as the trade flows between countries. The research literature review covers the objects related to foreign direct investment, detailed introduction and description of FDI and impacts of FDI. International Monetary Fund (IMF) has defined the FDI as an international investment of one company with the target of enduring relationship i.e. Investments made by company must exceed the equity of Target Company by 10%. The major requirements of the investors will help in faster growth of their organization which is explained by Nicolas, B. (2010) in terms of Control investments, supply of funds for foreign operations, a balance of payments flow and Capital transfers. 2.2. Brief History and background of Foreign Direct Investment In the present world, there exist various investment techniques for the corporations for increasing their growth. If these industries lacks in making right decisions in their investment then it may lead to reduce their growth and their level in the global market. So, many of the countries prefer Foreign Direct Investment (FDI) compare to other techniques because most of the corporations get affected financially due to their investment decisions. Mostly FDI is preferred as it is considered as an integral part of an open and effective international economic system and also referred as the major catalyst to development (OECD, 2002). In the present market, USA stood a number one position in FDI flows. According to Nicolas Breitfeld (2010, p.1), Foreign Direct Investment (FDI) is defined by the IMF as an international investment of one company with the intention of lasting relationship. Foreign Direct Investment (FDI) plays an important role in the financial sector. Generally most of the countries believe that increasing the international linkages through FDI is an important feature of financial globalization and elevates the major challenges for statistics and policymakers in industrial and developing countries (Neil, K. P., 2004). Further of this section, it clearly discusses the views of authors on FDI, the importance of FDI and mainly focuses on the issues that are being faced by the countries while introducing the FDI. Even-though authors define Foreign Direct Investment (FDI) in different ways based on their research it is mainly mend to development on countrys and globalization. Some of the authors views on FDI are discussed below: According to Organization for Economic Co-Operation and development (OECD) (2008, p.62), Foreign Direct Investment (FDI) occurs when a business located in one country (the direct investor) invests in a business located in another country (the direct investment enterprise) with the objective of creating a strategic and a lasting relationship. Here, the author suggests that occurrence of FDI exists only when the business persons invests their money in another country. They invest their income in another country by making some rules and regulations in their relationship. But according to Alexander, L. and IMFD, (2002), foreign direct investment defined as the integration of three components which are illustrated below: The branch profits need to be distributed and divided in equity without any holding withholding taxes. Accrued interest need to be paid to the direct investor by the direct investment enterprise, this can also be referred as income on debt. Earnings are reinvested in proportion with the direct investment stake. In this context, author says that the investment and the interest benefited by the business people need to be redistributed in an equal proportion among the investor and the direct investment enterprise. At the same time, Neil, K. P. (2004, p.3), discusses that according to BPM5 (Balance of Payments Manual) FDI defined as a category of international investment that reflects the objective of a resident in one economy (the direct investor) obtaining a lasting interest in an enterprise resident in another economy (the direct investment enterprise). ÂÂ  Here, the author discuss that FDI indirectly affects the economy of another country as the other country invest their income on another country for gaining interest on their investment. Even though the opinions and views of the authors differs in defining the FDI but all the authors focus on only one point that is the benefit dragged by the investor and the direct investment enterprise. These investors of get benefited globally with FDI on the interest on their investment and also increases their international linkages with the industries established in another country. ÂÂ   2.3. Impacts of FDI Foreign Direct Investment is considered as a driver of economic growth and development for developing countries which often lack the technology or capital to promote sustained economic growth and development. Mostly, FDI is considered as one of the major drivers of globalization as it continuously raises with the high growth rates before the financial crisis hit the world economy. The way through which FDI promotes economic growth and development to the countries is contentious because there is no definitive evidence and lags in supporting the literature. Even though there is no empirical evidence in representing the impact of FDI on the countries there are some theoretical explanations from which one can easily analyse the impacts of FDI on developed and developing countries. According to Bora, B. (2002, p.168), FDI flows were increasing rapidly much more quickly than international trade flows, which in turn were increasing faster than world GDP. Laura Alfaro (2003) says that FDI of fers great advantages to host countries because many of the academics and policy makers argue that there exists a most important positive effect on the development of host countries. FDI not only acts as the source of the valuable technology but also helps the countries in developing the linkages with the local firms that indirectly helps the country in raising the economy. Due to these reasons, most of the developing and industrialized countries offer incentive for encouraging the FDI in their economies. The environmental impacts of foreign direct investment may be positive, negative or neutral based on the institutional and industrial context. Gorg and Greenwood (2002) comes under a conclusion that the effect due to FDI is negative by reviewing the information from the foreign-owned to domestically owned firms. But Lipsey (2002) supports the positive benefits in preferring FDI. FDI flows attained a new record level right from the year 1990 to 2000. Then, from the year 2001 the gro wth in the investment failed and the later years it saw a steady and steep decline in global FDI flows. , Figure: Shows trends in global FDI flows during the year 1991 to 2003 (FDI, 2007, p.7). FDI affects the economic growth of the country in various aspects like it raises the formation of human capital, provides a facility to transfer the technology between the host countries and also stimulates the domestic investment. The relationship between the impact of FDI and economic growth can be easily analyzed with the help of production function and also with the other variables that affect economic growth such as domestic, trade, labour and capital (Falki, N. 2009). Production function was done based on the endogenous growth. According to Kumar, N. (1998, p.112), Direct investment was thought of mainly as a flow of capital, possibly replacing local capital or possibly representing marginal additions to the host countrys capital stock, followed by the necessity of financing dividends and interest, and possibly repatriation of capital. Some of the authors studied on the impact of FDI on economic growth in developing countries where those opinions are illustrated below: Authors views on Does FDI promote Economic Growth in developing countries S.No. Authors name Researched during the year Does FDI promote Economic Growth in developing countries (Yes/No/May be) Explanation 1. Balasubramanyam 1996, 1999 May be Requires open or neutral trade regime 2. Borensztein 1998 May be Depends on education level of workforce 3. De Mello 1999 May be Depends on degree of complementarily and substitution between FDI and domestic investment 4. Graham and Wada 2001 Yes Raised per capita GDP in Chinese provinces with FDI concentration 5. Graham 1995 May be TNCs market power can generate negative impacts 6. Loungani and Razin 2001 May be Risks 7. Lim 2001 May be Depends on tax incentives, regulatory and legal impediments, macroeconomic instability 8. Marino 2000 May be Requires open trade and investment policies 9. Mallampallyand Sauvant 1999 May be Requires human resource development, information and other infrastructure 10. Markusen and Venables 1999 Yes Raises productivity and exports of domestic firms, generates spillovers 11. Rodrik 1999 No Reverse causality: TNCs locate, rather than drive growth, in more productive and faster growing countries Table: Shows the authors explanation on Does FDI Promote Economic Growth in developing Countriesthis is a question? (LyubaZarsky, 2005, p.25) From the above table, it can be understood that out of 11 authors, only 2 authors support that FDI promotes economic growth in the developing countries as they explain that it raises the productivity, exports of domestic firms and stated a practical example that it raised the percapita GDP of china government with the help of FDI. Rodrik, opposed the views of the other authors on supporting the FDI as based on their research. From Rodrik research, it has been stated that it doesnt shown impact rather it was derived as a reverse causality. Apart from these three authors, the remaining 8 authors were in a dynamo whether to support the FDI or not because all these authors states that the impact on FDI on economic growth depends only on the circumstances that the author considers but not on any other aspects. For example: FDI shows more impact on economic growth only when the government fulfil some basic needs such as require open trade, investment policies, human resource development, i nformation, other infrastructure, etc. If these requirements are fulfilled by the government then automatically it get benefited with the FDI but if it fails in reaching those needs then it may face some risks due to the policies and the agreement between the countries. Hence, it can be stated that impacts of FDI directly depends on the situations and circumstances that are being considered by the government. By tightening of international financial conditions will have as awful effect on inflows of FDI. In the recent years, this has been main source of assets for many countries (U. N. Staff. 2009).FDI shows more effect on the economic growth of the countries as it provides various benefits to the countries that acquire FDI are illustrated below (Khan Arshad, 2007): Introduces the latest techniques and technologies of marketing and management with the help of FDI, the developing countries can know more about the latest techniques and the technologies that are being used by the developed countries. By acquiring and implementing these latest technologies in the developing countries, to some extent it can increase its growth in terms of economy. Exploitation and utilization of local raw materials usage of raw materials in the countries will be increased by exporting these excess materials to other countries and get benefited with them by importing other raw materials from other country which are shortage in their countries. Can be easily access to the new technologies as there will be a rapid flow between the countries, each of the country can know more easily about the other country and their religion. Based on this analysis, it can assess and access the technologies in their own region by making contract with the other countries. Financial flows between the countries Foreign inflows between the countries are used for financing current account deficits. The finance flows between the countries are transferred in the form of FDI where it doesnt generate interests and repayment of principal but internally raises the human capital stock through job training. Chapter 3: Empirical Literature on FDI based on INDIA and CHINA 3.1. Effects of FDI on all other countries when compared with India and china The existence of a strong negative relationship between trade share and country size was supported by the literature on trade and development. Country size and trade ratio are inversely proportional in size (larger the size of the country smaller is the trade ratio), the foreign trade, investment, and technology transfer between countries will directly affect the degree of sincerity and competitive pressures emanating from abroad (Pieter, B. 2007). Thus, the impact of these competitive pressures would be much less in a large country such as China and India than that among other East Asian NICs. In recent years china had recognized its need towards foreign trade, investment and technology with the aim of modernization, nothing like the Third World developing countries (India) that impoverished foreign capital. 1984-85 1994-95 1999-2000 2004-05 2006 2007 World 2.2 4.8 18.3 9.0 12.9 14.8 Developed economies 2.1 3.9 19.1 7.7 12.80 15.6 Developing economies 2.8 8.1 15.8 11.9 12.5 12.6 Developing Asia 2.3 7.9 12.1 9.9 11.0 10.6 East Asia 1.9 9.0 14.8 9.3 8.7 8.6 China 1.8 15.9 10.4 7.7 6.4 5.9 South Asia 0.2 1.7 2.4 3.3 6.2 5.7 India 0.1 1.7 2.7 3.1 6.6 5.8 Table 2: shows FDI inflow as percentage of gross domestic fixed capital formation (GDFCF), 1944 -2007. (Source: Prema, C. A. 2009, p.379) The average annual level of FDI inflow for developing Asia had raced sharply from US$ 19 billion during 1984 1985 to US$ 500 billion till 2007, at the same time share to developing countries have raised from 15.1 to 17.4 percent which is shown in the above table. The gross domestic fixed capital (GDFCF) as a share of FDI inflow is higher for all the developing countries in the period 1984 1996 and reversal due to the Asian financial crisis during 1997 98. FDI inflow for developing Asia with the average FDI/GDFCF ratio during entire period 1984 2007 is approximately 9 percent and 7.1 per cent when compared with all the developing countries at the same time the global average is 7.4 per cent. China is the recipient country of inward flow and the largest developing country from past two decades where it has been investigated a theoretical increase in inflow with in developing Asia. Among all the countries china was in the second position for total FDI flow as per the ASEAN countries , with increased average annual level of US$ 3 billion during 2000-2007, and from the year 1980 to 1997 almost before six years china was in the second half with US$ 30 billion which was the onset effect of financial crises from 1997-98, due to decline and with determination from about US$ 35 billion per annum before the year 1997 to an annual average of about US$ 24 billion between 1997-79. Establishment of export-oriented industries is heavily concentrated by chinas FDI, there observation on the share of FIEs for total exports in transition economies of china is two percent of expended persistently before 1980 and approximately 60 percent by the year 2006. India process to increases FDI participation in export- oriented activities which had remained at a outlier region of FDI whose one/third FDI during the independence in 1947 was a major amount of stock as a primary sector with plantation, mining and oil at the same time one/forth was the manufacturing and all the remaining stock s are in services, mostly trade, construction, transportation and utilities. The inflow started increasing in manufacturing from 1960s although with a divestment from this sector of FDI, since, low-wages, low skilled manpower are the Indias huge supply it can attract garments and other simple assembly activities which would indirectly favor the heavy foreign investment industry thus primarily focusing towards domestic market. From mid 1990s a slight increase in software is observed as well as significant competition with the world market at industrial production was not notable (Park, J. H. 2002).some of the difficulties which are to be faced and over come for fast development of the country . India faced many difficulties to attract foreign investors in both products and services market now it is only success to service industry of IT mainly. In order to overcome these difficulties to stimulate domestic demand this is given in three steps: The interest rates should be competitive in RBI. Value added tax (VAT) are to be implemented. Reduce the budget deficit through government. Figure: shows the financial states of India and china GDP the total chinas financial assets is approximately 220 per cent of GDP at the same time Indias financial assets is 160 per cent, countries savings and investment is the great strength for chinas financial system and Indias financial system is outside occur in savings and investments (Sources: Slide share 2008, slide No:18). 3.2. Fundamental policies of FDI India followed market-distorting policies on both foreign and private investments thus with this estimation about barriers for imports and exports are analyzed. Thus it become necessary to control the production and distribution as well as administered price controls etc. The impacts of opening up policies are likely to open up with foreign trade, investment and technology transfer, which would be much less in large countries of china and India when compared with all other East Asian NICs. Chinas opening policies in recent years is the success story with the favorable impact is not only for small economies but also for all large continental economies. China and India may not suffer from a large country constriction for adopting the export-oriented, outward-looking development strategy considerably (Park, J. H. 2002). The reformist policy is to fill the domestic savings gap which is necessary for economic development with foreign capital inflows, along with other goals in advanced for eign technology and managerial skills, and to promote exports to increase the foreign exchange earnings of the country. Due to open-door policy Chinas trade and inflow of foreign direct investment and loans are impressive, thus within a very short time china became a major exporting country, and an export competitor with the East Asian NICs (Newly Industrializing Countries) and ASEAN (Association of Southeast Asian Nations) countries in the Asia Pacific region. The opening policies in china have contributed to the countrys economic growth and development considering all domestic economic events. The Indias economic reforms undertaken in 1991 in light of Chinas experience with the export-oriented, foreign direct investment strategy for economic growth and development which has been examined with superiority of export-oriented, outward-looking development strategies. Thus China can provide important lessons and policy implications in economic development for all Third World developing countries like India. The success story of china open to worlds economy made it ideal for studying the relationship between trade and development as well as for testing the validity of export-promoting development strategy. 3.3. Historical Background and National Goals 3.3.1. History of FDI in India The generational explanation of history is given as follows after Indias independence: during 1947 to 48 there was the British owned the private foreign capital through the national policies resolution which is Swadeshi movement Industrial policy. In the next generation i.e. from 1949 to 1953 foreign investments where far away from trio of domestic business house with foreign capital as well as with the government nationalist sentiments. The second Economic plan was launched in 1957 as industrialization through import substitution and encouraging private investment. Some of the selected industries got foreign collaboration and JV mostly manufacturing companies which are retained participation in India FDI since 1960s, the devaluation of rupee encouraged the socialist idealism banks and foreign oil majors nationalized after late 1960s. After almost 8 years in 1968 the foreign investment board had encouraging investments on there own terms and conduction. In the year 1973as per the F oreign Exchange Act (FERA) which launched a new article that all firms should come together for their foreign equity, holding 40% of foreign equity to be considered as Indian companies due to which IBM as well as coca cola is exited. After seven years of strict vigilance on FDI, from the year 1980 licensing procedures were liberalized to softened, technology transfer and royalty payments relaxed, foreign investment was encouraged wherever possible. During 1900-s rupee value got down, withdrawal of NRI money, India turned to IMF; there was liberalization on trade regime and regulatory frame work. Many of the industries were invited by FDI and in some cases limit was increased from 51% to 100%. The service sector was again opened for FDI. The political instability after 1995 had started but a perception towards FDI had changed due to changes in government kept focus on FDI. 3.3.2. History of FDI in China China has joined the joint venture with other countries in the year1979, and by the year 1986 china became fully foreign owned enterprise. It was divided into four zones namely Shantou, Shenzhen, and Xiamen in the year 1980. After four years in 1984 it was found that chinas economic zone has fourteen cities and whole china combined by late 1900s. There was a rapid economic growth in reform period due to profusion of labour and its low costs, Rapid expansion of Chinas domestic market at the same time plays important role of overseas Chinese for increasing integration with world economy. The marketing effects are generally obtained by imports and exports in both bilateral countries. FDI is very essential for developing countries for Off setting the capital deficiency, Acquiring advanced technology, Gaining production know-how, Promoting exports as well as to Table 2: shows FDI in India-China products Trade (in million US Dollars). (Source: Prema, C. A. 2009, p.379) The two highest population countries of the world are India and China which together contain approximately 40 per cent of the worlds humidity on an adjacent landmass in Asia. Both countries are pride in birthplace of civilization entering the era of sharing worlds greatest development problem. The underdeveloped areas of these two countries is due to huge population relative to land and other resources, around 1950s there was no commitment to national planning for economic modernization as there was new governments of China and India, led by Mao Zedong and Jawaharlal Nehru so as to eliminate poverty and raise the standard of living (Park, J. H. 2002). Approaches to Development: Some of the important characteristics shared within India and China as the wealth of people relative to other rare resources such as arable land, natural resources, and capital suggesting the appropriate strategies for development would have involved production of labor-intensive goods. Among these some are exchanged for imports of capital goods and technology as per the necessity for development. For economic FDI Policies of India and China FDI Policies of India and China Chapter 1: Introduction 1.1. Overview Foreign Direct Investment is a hot topic in most policy circles as it is associated in many instances with significant macroeconomic changes and improvements in the range of goods and services produced in recipient countries. Furthermore growth in recipient countries is often ascribed to these inflows and so competition for higher inflows of FDI has become competitive. Most of the developing and developed countries increase their economy by enhancing their share in the global market through FDI inflows. As FDI shows more impact on the countrys economy, most of the foreigners are investing their amount in other countries for improving their profits with less manpower and minimum initial cost. These inflows were easily achieved by the investors by just fulfilling their basic requirements and maintaining their policies. FDI can be used by the countries only when they meet some of the major requirements like transfer of capital, a source of funds for foreign operations, Control investmen t and a balance of payments flow (Nicolas, B., 2010). Even though the FDI inflows in developing countries are low that is nearly 5%, this shows more impact on the economy in terms of the development programs by introducing new technologies. This change will be occurred only in the surroundings of investment areas. Here, in this research the FDI inflows between India and China are studied by comparing both the countries. Further of this study clearly explains the various aspects that are considered by the India and China for increasing the FDI inflows in the global market and also illustrates the policies that are followed by China as most of the investors prefer China when compare to the India. Finally, it recommends some of the policies and the changes that need to be made by the Indian Government for improving its FDI inflows. 1.2. Aim and Objectives Aim: To study the variations between the FDI policies of Indian and China based on their inflows and overall performance of the economy. Objectives: To study the importance of FDI and the required fundamental policies for acquiring the FDI. To research on the impact of FDI inflows in India and China based on their overall performance. Identifying the possible steps for Indian policy makers for improving their FDI inflows. Statistically evaluating the comparison between India and China in terms of FDI inflows. 1.3. Purpose of Study This study mainly focuses on the Foreign Direct Investment, the role of FDI in India and China and also illustrates the comparison between these two countries in terms of FDI. This research is selected in order to know more about the investments made by the developing countries and the involvement in international financial banking markets to influence the global and political aspects. This study is mostly useful for the people who are willing to know about the role played by FDI in the fast growing countries like India and China where these two countries differs in their environmental conditions. While researching about the FDI in both countries, one can easily analyze that China is showing more interest in attracting the FDI and is leading their economy when compare to India. So in order to clearly investigate on this point, this study also focuses on the aspects and the policies that need to be designed by the Indian country for attracting the investors and also to increase the ov erall performance of the economy by raising the inflows when compared to China. 1.4. Research Context In this study the researcher is focused on the worlds largest two most populated countries: India and China with a greatest history background. These two countries are known to be fast growing countries in the world and are known for their ample facilities and environmental conditions. These two countries are economically improving their standards in terms of technology and infrastructural growth. However, China is considered to be more positive in terms of attracting FDIs and are almost leading the comparison with India. In this research the time is a biggest constrain and to understand the research physically is really a tough target for the researcher by visiting both countries to meet and interview/ survey the financial organizations experts from various locations. However it is also noticed that in India only the FDI policies are changing from place to place based on the local governments rules and regulations. All the major rules and regulations governed by RBI and Government o f India are applicable, addition to that the investing company also needs to ensure that the environmental and ethical issues are not disturbed by the foreign investors in local and urban areas of various parts of India. As an example, there are some pilgrim places of India which does not allow non vegetarian food or related items so in that circumstance neither Government of India or RBI cannot allow the foreigners to invest their amount for a restaurant or bar and etc. Similarly in China it is one of the largest countries in the world and is having different cultures and backgrounds with in the country. Hence from the above context it is understood that this research will mainly focus on the secondary data available and in some areas it can get into the help of people related to the financial and banking industry. 1.5. Research Methodology For conducting any type of research, the data needs to be gathered by the researcher where this collected information should be in such a way that it is valid and accurate. Researcher need to choose a suitable method from various research methods, by which the researcher can successfully finish the research. Generally there exist two different types, primary data and secondary data. Primary data mainly focus on the aim of the research where the researcher can easily collects the information from various methods like surveys, interviews, etc. Where as in the secondary data, the researcher can collect the data only from the sources like journals, books, magazines, online articles, etc. where the researcher need to collect the accurate data as these recourses will not focus on the aim of research (Kumar, R., 2005). Here in this research, researcher collects the information through secondary data as the main aim of this research is to compare the FDI inflows in both India and China. As t he time is the biggest constrain, it will be really tough target for the researcher to select the primary data as the researcher either need to do interview /survey with the concern persons by visiting two countries where it cannot be possible with the period of time. So, its better to prefer secondary data for gathering accurate information for the research by referring various resources. Hence, the research can be successfully completed by analyzing the collected information and drawing the conclusion from this data. Chapter 2: Literature review 2.1. Overview This chapter will provide the suitable information and required material for completing research successfully with no issues during the research process. At the same time the literature review gives a basic idea about the research problem solving background with additional material from their related background history. The growth of multinational enterprise (MNE) activity in foreign direct investment (FDI) has grown at a faster rate than most other international transactions as well as the trade flows between countries. The research literature review covers the objects related to foreign direct investment, detailed introduction and description of FDI and impacts of FDI. International Monetary Fund (IMF) has defined the FDI as an international investment of one company with the target of enduring relationship i.e. Investments made by company must exceed the equity of Target Company by 10%. The major requirements of the investors will help in faster growth of their organization which is explained by Nicolas, B. (2010) in terms of Control investments, supply of funds for foreign operations, a balance of payments flow and Capital transfers. 2.2. Brief History and background of Foreign Direct Investment In the present world, there exist various investment techniques for the corporations for increasing their growth. If these industries lacks in making right decisions in their investment then it may lead to reduce their growth and their level in the global market. So, many of the countries prefer Foreign Direct Investment (FDI) compare to other techniques because most of the corporations get affected financially due to their investment decisions. Mostly FDI is preferred as it is considered as an integral part of an open and effective international economic system and also referred as the major catalyst to development (OECD, 2002). In the present market, USA stood a number one position in FDI flows. According to Nicolas Breitfeld (2010, p.1), Foreign Direct Investment (FDI) is defined by the IMF as an international investment of one company with the intention of lasting relationship. Foreign Direct Investment (FDI) plays an important role in the financial sector. Generally most of the countries believe that increasing the international linkages through FDI is an important feature of financial globalization and elevates the major challenges for statistics and policymakers in industrial and developing countries (Neil, K. P., 2004). Further of this section, it clearly discusses the views of authors on FDI, the importance of FDI and mainly focuses on the issues that are being faced by the countries while introducing the FDI. Even-though authors define Foreign Direct Investment (FDI) in different ways based on their research it is mainly mend to development on countrys and globalization. Some of the authors views on FDI are discussed below: According to Organization for Economic Co-Operation and development (OECD) (2008, p.62), Foreign Direct Investment (FDI) occurs when a business located in one country (the direct investor) invests in a business located in another country (the direct investment enterprise) with the objective of creating a strategic and a lasting relationship. Here, the author suggests that occurrence of FDI exists only when the business persons invests their money in another country. They invest their income in another country by making some rules and regulations in their relationship. But according to Alexander, L. and IMFD, (2002), foreign direct investment defined as the integration of three components which are illustrated below: The branch profits need to be distributed and divided in equity without any holding withholding taxes. Accrued interest need to be paid to the direct investor by the direct investment enterprise, this can also be referred as income on debt. Earnings are reinvested in proportion with the direct investment stake. In this context, author says that the investment and the interest benefited by the business people need to be redistributed in an equal proportion among the investor and the direct investment enterprise. At the same time, Neil, K. P. (2004, p.3), discusses that according to BPM5 (Balance of Payments Manual) FDI defined as a category of international investment that reflects the objective of a resident in one economy (the direct investor) obtaining a lasting interest in an enterprise resident in another economy (the direct investment enterprise). ÂÂ  Here, the author discuss that FDI indirectly affects the economy of another country as the other country invest their income on another country for gaining interest on their investment. Even though the opinions and views of the authors differs in defining the FDI but all the authors focus on only one point that is the benefit dragged by the investor and the direct investment enterprise. These investors of get benefited globally with FDI on the interest on their investment and also increases their international linkages with the industries established in another country. ÂÂ   2.3. Impacts of FDI Foreign Direct Investment is considered as a driver of economic growth and development for developing countries which often lack the technology or capital to promote sustained economic growth and development. Mostly, FDI is considered as one of the major drivers of globalization as it continuously raises with the high growth rates before the financial crisis hit the world economy. The way through which FDI promotes economic growth and development to the countries is contentious because there is no definitive evidence and lags in supporting the literature. Even though there is no empirical evidence in representing the impact of FDI on the countries there are some theoretical explanations from which one can easily analyse the impacts of FDI on developed and developing countries. According to Bora, B. (2002, p.168), FDI flows were increasing rapidly much more quickly than international trade flows, which in turn were increasing faster than world GDP. Laura Alfaro (2003) says that FDI of fers great advantages to host countries because many of the academics and policy makers argue that there exists a most important positive effect on the development of host countries. FDI not only acts as the source of the valuable technology but also helps the countries in developing the linkages with the local firms that indirectly helps the country in raising the economy. Due to these reasons, most of the developing and industrialized countries offer incentive for encouraging the FDI in their economies. The environmental impacts of foreign direct investment may be positive, negative or neutral based on the institutional and industrial context. Gorg and Greenwood (2002) comes under a conclusion that the effect due to FDI is negative by reviewing the information from the foreign-owned to domestically owned firms. But Lipsey (2002) supports the positive benefits in preferring FDI. FDI flows attained a new record level right from the year 1990 to 2000. Then, from the year 2001 the gro wth in the investment failed and the later years it saw a steady and steep decline in global FDI flows. , Figure: Shows trends in global FDI flows during the year 1991 to 2003 (FDI, 2007, p.7). FDI affects the economic growth of the country in various aspects like it raises the formation of human capital, provides a facility to transfer the technology between the host countries and also stimulates the domestic investment. The relationship between the impact of FDI and economic growth can be easily analyzed with the help of production function and also with the other variables that affect economic growth such as domestic, trade, labour and capital (Falki, N. 2009). Production function was done based on the endogenous growth. According to Kumar, N. (1998, p.112), Direct investment was thought of mainly as a flow of capital, possibly replacing local capital or possibly representing marginal additions to the host countrys capital stock, followed by the necessity of financing dividends and interest, and possibly repatriation of capital. Some of the authors studied on the impact of FDI on economic growth in developing countries where those opinions are illustrated below: Authors views on Does FDI promote Economic Growth in developing countries S.No. Authors name Researched during the year Does FDI promote Economic Growth in developing countries (Yes/No/May be) Explanation 1. Balasubramanyam 1996, 1999 May be Requires open or neutral trade regime 2. Borensztein 1998 May be Depends on education level of workforce 3. De Mello 1999 May be Depends on degree of complementarily and substitution between FDI and domestic investment 4. Graham and Wada 2001 Yes Raised per capita GDP in Chinese provinces with FDI concentration 5. Graham 1995 May be TNCs market power can generate negative impacts 6. Loungani and Razin 2001 May be Risks 7. Lim 2001 May be Depends on tax incentives, regulatory and legal impediments, macroeconomic instability 8. Marino 2000 May be Requires open trade and investment policies 9. Mallampallyand Sauvant 1999 May be Requires human resource development, information and other infrastructure 10. Markusen and Venables 1999 Yes Raises productivity and exports of domestic firms, generates spillovers 11. Rodrik 1999 No Reverse causality: TNCs locate, rather than drive growth, in more productive and faster growing countries Table: Shows the authors explanation on Does FDI Promote Economic Growth in developing Countriesthis is a question? (LyubaZarsky, 2005, p.25) From the above table, it can be understood that out of 11 authors, only 2 authors support that FDI promotes economic growth in the developing countries as they explain that it raises the productivity, exports of domestic firms and stated a practical example that it raised the percapita GDP of china government with the help of FDI. Rodrik, opposed the views of the other authors on supporting the FDI as based on their research. From Rodrik research, it has been stated that it doesnt shown impact rather it was derived as a reverse causality. Apart from these three authors, the remaining 8 authors were in a dynamo whether to support the FDI or not because all these authors states that the impact on FDI on economic growth depends only on the circumstances that the author considers but not on any other aspects. For example: FDI shows more impact on economic growth only when the government fulfil some basic needs such as require open trade, investment policies, human resource development, i nformation, other infrastructure, etc. If these requirements are fulfilled by the government then automatically it get benefited with the FDI but if it fails in reaching those needs then it may face some risks due to the policies and the agreement between the countries. Hence, it can be stated that impacts of FDI directly depends on the situations and circumstances that are being considered by the government. By tightening of international financial conditions will have as awful effect on inflows of FDI. In the recent years, this has been main source of assets for many countries (U. N. Staff. 2009).FDI shows more effect on the economic growth of the countries as it provides various benefits to the countries that acquire FDI are illustrated below (Khan Arshad, 2007): Introduces the latest techniques and technologies of marketing and management with the help of FDI, the developing countries can know more about the latest techniques and the technologies that are being used by the developed countries. By acquiring and implementing these latest technologies in the developing countries, to some extent it can increase its growth in terms of economy. Exploitation and utilization of local raw materials usage of raw materials in the countries will be increased by exporting these excess materials to other countries and get benefited with them by importing other raw materials from other country which are shortage in their countries. Can be easily access to the new technologies as there will be a rapid flow between the countries, each of the country can know more easily about the other country and their religion. Based on this analysis, it can assess and access the technologies in their own region by making contract with the other countries. Financial flows between the countries Foreign inflows between the countries are used for financing current account deficits. The finance flows between the countries are transferred in the form of FDI where it doesnt generate interests and repayment of principal but internally raises the human capital stock through job training. Chapter 3: Empirical Literature on FDI based on INDIA and CHINA 3.1. Effects of FDI on all other countries when compared with India and china The existence of a strong negative relationship between trade share and country size was supported by the literature on trade and development. Country size and trade ratio are inversely proportional in size (larger the size of the country smaller is the trade ratio), the foreign trade, investment, and technology transfer between countries will directly affect the degree of sincerity and competitive pressures emanating from abroad (Pieter, B. 2007). Thus, the impact of these competitive pressures would be much less in a large country such as China and India than that among other East Asian NICs. In recent years china had recognized its need towards foreign trade, investment and technology with the aim of modernization, nothing like the Third World developing countries (India) that impoverished foreign capital. 1984-85 1994-95 1999-2000 2004-05 2006 2007 World 2.2 4.8 18.3 9.0 12.9 14.8 Developed economies 2.1 3.9 19.1 7.7 12.80 15.6 Developing economies 2.8 8.1 15.8 11.9 12.5 12.6 Developing Asia 2.3 7.9 12.1 9.9 11.0 10.6 East Asia 1.9 9.0 14.8 9.3 8.7 8.6 China 1.8 15.9 10.4 7.7 6.4 5.9 South Asia 0.2 1.7 2.4 3.3 6.2 5.7 India 0.1 1.7 2.7 3.1 6.6 5.8 Table 2: shows FDI inflow as percentage of gross domestic fixed capital formation (GDFCF), 1944 -2007. (Source: Prema, C. A. 2009, p.379) The average annual level of FDI inflow for developing Asia had raced sharply from US$ 19 billion during 1984 1985 to US$ 500 billion till 2007, at the same time share to developing countries have raised from 15.1 to 17.4 percent which is shown in the above table. The gross domestic fixed capital (GDFCF) as a share of FDI inflow is higher for all the developing countries in the period 1984 1996 and reversal due to the Asian financial crisis during 1997 98. FDI inflow for developing Asia with the average FDI/GDFCF ratio during entire period 1984 2007 is approximately 9 percent and 7.1 per cent when compared with all the developing countries at the same time the global average is 7.4 per cent. China is the recipient country of inward flow and the largest developing country from past two decades where it has been investigated a theoretical increase in inflow with in developing Asia. Among all the countries china was in the second position for total FDI flow as per the ASEAN countries , with increased average annual level of US$ 3 billion during 2000-2007, and from the year 1980 to 1997 almost before six years china was in the second half with US$ 30 billion which was the onset effect of financial crises from 1997-98, due to decline and with determination from about US$ 35 billion per annum before the year 1997 to an annual average of about US$ 24 billion between 1997-79. Establishment of export-oriented industries is heavily concentrated by chinas FDI, there observation on the share of FIEs for total exports in transition economies of china is two percent of expended persistently before 1980 and approximately 60 percent by the year 2006. India process to increases FDI participation in export- oriented activities which had remained at a outlier region of FDI whose one/third FDI during the independence in 1947 was a major amount of stock as a primary sector with plantation, mining and oil at the same time one/forth was the manufacturing and all the remaining stock s are in services, mostly trade, construction, transportation and utilities. The inflow started increasing in manufacturing from 1960s although with a divestment from this sector of FDI, since, low-wages, low skilled manpower are the Indias huge supply it can attract garments and other simple assembly activities which would indirectly favor the heavy foreign investment industry thus primarily focusing towards domestic market. From mid 1990s a slight increase in software is observed as well as significant competition with the world market at industrial production was not notable (Park, J. H. 2002).some of the difficulties which are to be faced and over come for fast development of the country . India faced many difficulties to attract foreign investors in both products and services market now it is only success to service industry of IT mainly. In order to overcome these difficulties to stimulate domestic demand this is given in three steps: The interest rates should be competitive in RBI. Value added tax (VAT) are to be implemented. Reduce the budget deficit through government. Figure: shows the financial states of India and china GDP the total chinas financial assets is approximately 220 per cent of GDP at the same time Indias financial assets is 160 per cent, countries savings and investment is the great strength for chinas financial system and Indias financial system is outside occur in savings and investments (Sources: Slide share 2008, slide No:18). 3.2. Fundamental policies of FDI India followed market-distorting policies on both foreign and private investments thus with this estimation about barriers for imports and exports are analyzed. Thus it become necessary to control the production and distribution as well as administered price controls etc. The impacts of opening up policies are likely to open up with foreign trade, investment and technology transfer, which would be much less in large countries of china and India when compared with all other East Asian NICs. Chinas opening policies in recent years is the success story with the favorable impact is not only for small economies but also for all large continental economies. China and India may not suffer from a large country constriction for adopting the export-oriented, outward-looking development strategy considerably (Park, J. H. 2002). The reformist policy is to fill the domestic savings gap which is necessary for economic development with foreign capital inflows, along with other goals in advanced for eign technology and managerial skills, and to promote exports to increase the foreign exchange earnings of the country. Due to open-door policy Chinas trade and inflow of foreign direct investment and loans are impressive, thus within a very short time china became a major exporting country, and an export competitor with the East Asian NICs (Newly Industrializing Countries) and ASEAN (Association of Southeast Asian Nations) countries in the Asia Pacific region. The opening policies in china have contributed to the countrys economic growth and development considering all domestic economic events. The Indias economic reforms undertaken in 1991 in light of Chinas experience with the export-oriented, foreign direct investment strategy for economic growth and development which has been examined with superiority of export-oriented, outward-looking development strategies. Thus China can provide important lessons and policy implications in economic development for all Third World developing countries like India. The success story of china open to worlds economy made it ideal for studying the relationship between trade and development as well as for testing the validity of export-promoting development strategy. 3.3. Historical Background and National Goals 3.3.1. History of FDI in India The generational explanation of history is given as follows after Indias independence: during 1947 to 48 there was the British owned the private foreign capital through the national policies resolution which is Swadeshi movement Industrial policy. In the next generation i.e. from 1949 to 1953 foreign investments where far away from trio of domestic business house with foreign capital as well as with the government nationalist sentiments. The second Economic plan was launched in 1957 as industrialization through import substitution and encouraging private investment. Some of the selected industries got foreign collaboration and JV mostly manufacturing companies which are retained participation in India FDI since 1960s, the devaluation of rupee encouraged the socialist idealism banks and foreign oil majors nationalized after late 1960s. After almost 8 years in 1968 the foreign investment board had encouraging investments on there own terms and conduction. In the year 1973as per the F oreign Exchange Act (FERA) which launched a new article that all firms should come together for their foreign equity, holding 40% of foreign equity to be considered as Indian companies due to which IBM as well as coca cola is exited. After seven years of strict vigilance on FDI, from the year 1980 licensing procedures were liberalized to softened, technology transfer and royalty payments relaxed, foreign investment was encouraged wherever possible. During 1900-s rupee value got down, withdrawal of NRI money, India turned to IMF; there was liberalization on trade regime and regulatory frame work. Many of the industries were invited by FDI and in some cases limit was increased from 51% to 100%. The service sector was again opened for FDI. The political instability after 1995 had started but a perception towards FDI had changed due to changes in government kept focus on FDI. 3.3.2. History of FDI in China China has joined the joint venture with other countries in the year1979, and by the year 1986 china became fully foreign owned enterprise. It was divided into four zones namely Shantou, Shenzhen, and Xiamen in the year 1980. After four years in 1984 it was found that chinas economic zone has fourteen cities and whole china combined by late 1900s. There was a rapid economic growth in reform period due to profusion of labour and its low costs, Rapid expansion of Chinas domestic market at the same time plays important role of overseas Chinese for increasing integration with world economy. The marketing effects are generally obtained by imports and exports in both bilateral countries. FDI is very essential for developing countries for Off setting the capital deficiency, Acquiring advanced technology, Gaining production know-how, Promoting exports as well as to Table 2: shows FDI in India-China products Trade (in million US Dollars). (Source: Prema, C. A. 2009, p.379) The two highest population countries of the world are India and China which together contain approximately 40 per cent of the worlds humidity on an adjacent landmass in Asia. Both countries are pride in birthplace of civilization entering the era of sharing worlds greatest development problem. The underdeveloped areas of these two countries is due to huge population relative to land and other resources, around 1950s there was no commitment to national planning for economic modernization as there was new governments of China and India, led by Mao Zedong and Jawaharlal Nehru so as to eliminate poverty and raise the standard of living (Park, J. H. 2002). Approaches to Development: Some of the important characteristics shared within India and China as the wealth of people relative to other rare resources such as arable land, natural resources, and capital suggesting the appropriate strategies for development would have involved production of labor-intensive goods. Among these some are exchanged for imports of capital goods and technology as per the necessity for development. For economic