An Investigation Of The Risks Faced Example For Free - Free Essay Example

Sample details Pages: 11 Words: 3276 Downloads: 2 Date added: 2017/06/26 Category Finance Essay Type Research paper Tags: Investment Essay Risk Essay Did you like this example? Banks are type of Financial Institutions that facilitate the flow of funds and are the back bone of the economy. So banks act as financial intermediaries to interact the deficient units with surplus units and in this the banks bear certain risks. One of the risks is the credit risk or default risk. Don’t waste time! Our writers will create an original "An Investigation Of The Risks Faced Example For Free" essay for you Create order A bank is exposed to this risk when it lends money from the money of the depositors and the borrower is unable to repay the debt. This risk is one of the major risks faced by banks and it has increased significantly over the years due to the global financial crisis of 2007. The financial crisis has exposed banks to huge amount to risks leading the banks to become bankrupt and insolvent. Banks have tried to reduce the impact by concentrating in particular sectors that is lending to a few sector mostly. In Pakistan, initially banks concentrated in agriculture sector and later they have shifted their focus to the manufacturing sector due to massive industrialization and potential in the sector. So now banks are lending around 30% of the total advances to the textile sector which is one of the largest components of the manufacturing sector. Though, this lending to a particular sector hasnt borne the fruit for commercial banks. One of the major reasons is that the textile sector is facing awful times in the form of decline in exports in the US market as well as the European market. Now these markets are dominated by China. Pakistan currently faces an on going problem of energy shortage which has forced the textile sector to resort to other ways of meeting the energy gap. These alternative ways are costly and have thus led to expensive exports which are no longer lucrative in the international market. Hence, textile sector is unable to repay their debts and the banks bear the cost in the form of increased non performing loans. 1.2: Relevance of the topic and research title Pakistans Banking sector is one of the sound sectors which comprises of major players in the financial market. These players are Financial Institutions particularly Banks like Muslim Commercial Bank, Habib Bank and Bank Alfalah and some foreign banks like Barclays and Citi Bank. As more and more products are being introduced by the banks, in an attempt to diversify, more choices are available to the consumer to invest his money hence banks are now shifting their focus from traditional or conventional modes of banking into modern and sophisticated modes. Now with the changes in the banks portfolio, banks are extending more credit and investing more. In this era of change, banks with their lucrative offers and products are paving an entirely new path for various modes of investment. These new ways are getting customers to invest and borrow more which has resulted in a higher default thus making banks more vulnerable. In order to mitigate the impact of this default rate surge banks are concentrating there loan portfolio in credit worthy sectors but this risk management practice has failed the banks because there has been massive defaults in the sector they concentrated in which was textile sector. Hence, as the title of the research topic is Analysis of Credit Risk in the Textile Sector probes into the causes and determinants of this higher default rate or surge in non performing loans due to the textile sector. The subsequent research will outline the impact of various Bank specific, institutional and macroeconomic factors in assessing credit risk of various banks. It will investigate the impact that one sector can have on the overall banks credit risk and the extent of that risk. 1.3: Background Information and Evolution Pakistan is one of those countries where there has been rapid growth over the years especially in the field of Banking. Banking is one of the most responsive businesses all over the world. Banks play very significant function in the economy of a country and Pakistan is no exception. Banks are guardian to the assets of the general masses. 1.3.1: Pakistans Banking Industry The Pakistans Banking Sector has experienced massive growth in terms of size and scale of business. The Banking sector, which was entirely dominated by Nationalized Commercial Banks (NCBs) until a few years ago, has been opened up to the private sector. The sector has witnessed an exceptional development in 2005-09. There are 45 scheduled banks  [1]  (including 7 foreign banks) operating in Pakistan which has increased the competition, particularly after the testing capital adequacy benchmarks set by the State Bank of Pakistan to nurture a steady banking system. Draw foreign ventures and captivating lucrative clients are the only alternative left to banks for sustained continuation. Furthermore, banks are inclined to build their organizations to give the impression of being unique from their market competitors by pursuing divergent and distinctive strategies and by introducing products and services through product differentiation. This is leading to massive competition which is touching new altitudes in the banking business and it will obtain more vigor. A number of aspects are escalating the frontiers of competition in both funding and asset use. Moreover, chances for foreign banks, particularly in consumer and retail banking, are superior than ever before and there is noteworthy transfer of spotlight from industrial lending to consumer products which has facilitated the banks to get advantage from massive spreads. Though, the manufacturing sector is still enjoying the highest share in credit facilities extended by the banking industry. Hence due to these new opportunities, the banking industrys assets have also increased over the years. Advances have increased by around 15%  [2]  from 2001-2009. Thats means there has been a decade wide growth of 15% in the advances extended by the banking sector. Whereas, deposits have also experienced a considerable growth of around 14% which signifies the fact that the banks are actively accepting deposit s and lending out in accordance the amount generated by deposits and hence earning a profit. Profits have increased till 2005 and peaked in 2006 but in 2007 due to the global financial crisis have experienced a downfall and the trickle down effects of this recession are being faced by the banking sector currently as well. On the other hand, market pressures compels the banks to make loans in unknown areas loosening the rope of risk management but the current key ratios point towards an outstanding uphill trend in the banking industry with gigantic banking spreads, particularly during the last half decade. Provision for loan losses is ascending over the years. Troubled loans or non performing advances are regarded as a cancer for banking industry. It can be said that quality loans is the ultimate objective for bankers today. Moving on, The Merger game is taking the front seat in the world. A craze for giant banks is developing to benefit effectively from the future market op enings and to tame ever increasing competition. But there are inherent constraints in this mania. The economies of scale vanish automatically after a certain level of expansion in the banking industry.  [3] 1.3.2: Credit Risk faced by Banking Sector While the possession and administration of the banks by private sector is one pillar of the reforms, the other pillar is well-built regulatory environment. Private Commercial Banks are prone to taking unnecessary risks in their lending as their own capital is much lesser in relation to the depositors money. They can realize the huge upside potential from high-risk assets while the defaults and damages in event of downside scenario are borne disproportionately by the depositors. The banking sector has now diversified its product base and carried out a lot of innovation. They have expanded their out reach to agriculture, SMEs, mortgage financing and consumer financing. Not only that this diversified lending portfolio mitigates risks but it also raises the purchasing power of a large segment of population that was completely shut out from credit markets. Pakistans auto industry has expanded its car production by a multiple of five times in the last four years as auto financing enab led a vast number of middle class income earners to purchase the cars on monthly installments. The affordability of these new products by the middle class became possible as the prudent fiscal and monetary policies pursued by the Government left a lot of liquidity in the banking system. The Government, by reducing its fiscal deficit and public sector enterprises by making cash profits, freed up loan-able funds for the use of the private sector. The Central Bank by pursuing an accommodating monetary policy did not mop up excess liquidity and helped the businesses and consumers to access funds at historically record low levels. Due to these new products and the provision of credit facilities to middle class has led to an increase in the non performing loans. This is so because consumers with lower credit worthiness tend to default more thats why the banking industry has faced an overall surge in the defaults. To make matters worse the natural disasters (floods and earthquakes) h ave exposed the banking industry to a higher default rates. This can be shown by a surge in the non performing loans of the banking sector. The ratio of NPL/Advances net has increased from 1.6 in 2006 to 3.8 in 2010.  [4]  Which shows that despite facilitating the credit to organizations and consumers, there has also been an increase in the non performing loans? The rising quantum of NPLs is not a high-quality indication for the general financial steadiness, creditability and prosperity of the banking structure. The mounting ratio of NPLs deficiently influences the lending rate. It is also one of the most important reasons for the sluggish revitalization of ill units in the country. It is eventually causing slow down in industrial productivity and economic activity. This circumstances forces the managers of the banking industry to give minimal return to the depositors and charge high mark-up on loans. Low return on deposits dampens savings, which are already very little.  [ 5] So, it is the duty of the central bank as a regulator to be exceptionally vigilant and take timely action to thwart the bank managers and owners from assuming excessive risks. The Central Bank in Pakistan has strengthened its capacity by acquiring new skills, upgrading the quality of the on hand human resources base, adopting technology and re-engineering business practices. The banking regulation and supervision are risk-based and are fully compliant with the international standards and codes prescribed by Basel Committee. The risk management practices are being customized to conform to Basel II rules. The financial soundness indicators show a healthy and sound banking system with high level of financial consistency. 1.3.3: Textile Sector and Credit Risk   The portion of textile exports in entire exports of the country contracted to 55 percent in the current financial year as compared to 60 percent in the past years. As the total export quantity lingered to be stagnant in the first seven months of the current financial year, the shrinking share of textile goods in exports has been unfavorably affecting the export sector. During July-January 2009-10, total exports came to $10.870 billion. In the months under review, textile export proceeds totaled to $5.981 billion. Pakistans share of the US textile market is dropping. China tops the US market with a share of 36 per cent followed by Bangladesh 21 per cent, India 18 per cent, Morocco 19 per cent and Pakistan 13 per cent. South Korea has lost 20 per cent of the US market. In the European market, China tops again with a share of 29 per cent, Vietnam 28 per cent, India 19 per cent and Pakistan only 1.5 per cent while the Philippines had lost 11 per cent of the market.  [6]   Most importantly for firms and manufacturing sector the reason for this surge in non performing loans has been due to the decline in exports augmented with energy shortfall the country currently faces. Massive shortfall of electricity and gas has rendered major organizations and businesses to reside with expensive ways of production which has increased their costs tremendously. Hence, the gigantic cost borne by the manufacturers has hampered the repayment capability of the firms. Naturally this situation has raised the infected debts with the banks. The textile sector has a substantial contribution in the deterioration of banks overall loan portfolio. In July-March 2009, the infection ratio of the textile sector loans increased to 17.9 per cent from 14.6 per cent in the same period of last year, while the share of textile in total loans to private sector was 19.3 per cent, but it constituted about one-third or 30 per cent of the total non-performing loans (NPLs) of the private sector.  [7] 1.4: Managerial and Academic Concerns Banks main concern is to earn a decent spread or profits. This profitability of the banks is heavily dependent on the degree of concentration in their loan portfolio that is to which sectors they lent heavily and to which they extend few loans. Concentration of loan portfolio is basically a risk management strategy which enables banks to earn a modest return and minimizes the chance of default. For banks it is very important, when talking about the Credit risk, because default risks is the biggest risk the financial institution is exposed to. Hence for a bank it is of extreme importance to be aware of the sectors which are credit worthy and the probability of repayment is high in which sectors, so that they can manage their loan portfolio accordingly and lend to sectors which are not or less prone to default. Furthermore, this study can be carried forward to analyze the differences between with and without diversification done by banks on their credit risk or non performing loan s to be specific. In addition, this study will be useful in investigating the most likely factors which lead to an increase in the default risk of banks. One of the major academic concerns is that the panel cross sectional analysis will act as aid in providing deep insight on banking practices to people inside the banks as well as outside. 1.5: Problem Discussion Credit risk management is one of the most important issues in banking due to the weight it carries in assuring banks survival. Credit risk arises from the potential that an obligor is either unwilling to perform on an obligation or its ability to perform such obligation is impaired resulting in economic loss to the bank  [8]  . In other words, it is the risk that customers will default on their debt obligations and the probability that the credit worthiness of the borrower will decline, which means that the chances of default increases. So, it is very important for banks to monitor the credit risk the portfolio is exposed to since a large default can lead to banks insolvency. To avoid this insolvency banks have to monitor their positions and make sure that the amount lent to anyone customer and/or customers within a single industry and/or a give country is limited. It is generally acknowledged that the amount or percentage of non-performing loans (NPLs) is usually linked wit h bank failures and financial disasters in both developing and developed countries. In reality, there is plentiful substantiation that the financial/banking crises in East Asia and Sub-Saharan African countries were preceded by high non-performing loans. The present worldwide financial crisis, which instigated in the US, was also credited to the speedy non-payment of sub-prime loans/mortgages. In examination of this truth it is for that reason comprehensible why a large amount of stress is placed on non-performing loans when investigating financial vulnerabilities.  [9] So to minimize risk banks either monitor their portfolios or diversify. Banks wish to diversify because the cost of monitoring is greater than the benefit so banks diversify across economic sectors or geographic regions. Diversification increases the average return of the bank, which generally reduces the banks chance of failure. Nevertheless, if banks loans have sufficiently low exposure to sector downturns, a specialized bank has a low probability of failure, so the benefit of diversification is slight. If banks loans have sufficiently high exposure to sector downturns, diversification can actually increase the banks chance of failure: a downturn in one sector is enough to make a diversified bank fail, and a diversified bank is exposed to more sectors than a specialized one. Thus, all else equal, diversifications benefits are greatest when the banks loans have moderate levels of credit risk  [10] Hence, the financial soundness of the Pakistani banks depends upon the sectors performance to which they concentrated in. In this case the textile sector of Pakistans economy is facing a downturn due to reduced demand for textile in the foreign market, thats why the sector is unable to pay back its debt and shifts the burden of risk on the banks. If the banks are financial sound they will absorb such shocks otherwise they will face insolvency. 1.6: Keywords and Definitions The credit policy: To maximize the short run benefits, managers seek to rapidly expand credit activities and may hence take inadequate credit exposures. Particularly, during periods of economic growth, the financial institutions engage in market share conquest campaigns discarding the necessary assessment of credit quality of borrowers. This will lead, through adverse selection reasoning, to an increase of problem loans. As loans growth rate exceeds a certain point, further loans growth adds increase bad loans. Capital adequacy ratio: a tool to control excessive risk taking by banks and to prevent them from being insolvent through recapitalization (Basel accord). Banks with level of capital adequacy ratio (CAR) less than the regulatory minimum are forced to adjust their balance sheet to comply with the regulatory requirement either by raising more capital (holding assets constant) or reducing risk weighted assets (holding capital constant) banks with high levels of CAR might be encouraged to embark in riskier activities leading to riskier credit portfolios Banks Performance: Banks with high profitability are less pressured to revenue creation and thus less constrained to engage in risky credit offerings. Diversification: reduces risk taking as it makes possible the compensation for losses in some product by gains in others. For well diversified banks, where non-interest revenues are important, NPLs should be lower than for less (poorly) diversified financial institutions Size: larger banks have more resources, and are more experimented to better deal with bad borrowers Foreign ownership: a negative effect of foreign ownership on nonperforming loans leading to improve domestic banks credit quality. State Ownership: state-owned banks have more incentives to fund riskier projects and to allocate more favorable credits to small and medium firms. NPLs tend to be higher for banks with state ownership than for other groups Bank-level efficiency: ratio of operating expenses to total assets Bank leverage: (measured by debt to equity ratio) 1.7: Study Objectives The goal of this paper is to examine the sensitivity of non-performing loans to macroeconomic and bank specific factors in Pakistan. In particular, it utilizes regression analysis covering 10 years (2001 to 2009) to scrutinize the association involving non-performing loans and numerous key macroeconomic and bank specific variables. The aim of this research is twofold. First, it seeks to explain differences in NPL levels amongst different commercial banks. Second, it addresses the possible impact of business and institutional environment on the rate of NPL at the bank level. Based on existing literature, we model nonperforming loans disparity between banks as a function of both bank specific and environmental factors. The former serves to capture differences between banks in terms of ownership structure, credit and provisions policies and level of regulatory capital. The latter category allows us to control differences in business and institutional environment between banks to as sess the link between their effectiveness and a well-functioning financial system. This research paper includes a literature view supporting the theoretical framework. Then a proper planned methodology is presented to test empirical evidences and lastly findings are reported and analyses of the findings are done along with the conclusion.

Diagnosis And Treatment Of Breast Cancer - 2197 Words

One out of every eight women in the US is diagnosed with breast cancer every year. When women get older, their chances of developing breast cancer increases. In fact, 80% of all breast cancer patients are women ages fifty and up. As the number of breast cancer patients increases year after year, identification methods and treatments are beginning to advance. Doctors and pathologists are using the highest levels of technology to treat abnormalities inside of the body. The tumor is discovered through either mammography or self-breast examinations. Through these methods, doctors are able to discover the tumor and decide on what treatment is right for each patient. When it comes to treating breast cancer, there are multiple treatment options; the type and severity of the cancer help the doctor decide the optimal treatment plan for each patient. Identification is the first and most critical step in treating breast cancer, detection methods include self-breast examinations and mammography. Self-breast examinations are highly recommended for anyone of any age who has breasts. For this method, every month women check the areas around their breast as well as under their arms for any abnormal lumps (Breast World 4). Those who go about doing these examinations have a greater chance of identifying their cancerous mass sooner because of how frequently they are checking (4). Mammography is another helpful way to identify any lumps or abnormalities. In this process, a large machine usesShow MoreRelatedThe Diagnosis And Treatment Of Breast Cancer1947 Words   |  8 Pages3D Mammography The diagnosis and treatment of breast cancer and other non-cancerous diseases are very important in improving the quality of life for many women. The early diagnosis of the non-cancerous disease can reduce the incidence of breast cancer through effective treatment of mastopathy (fibrocystic of the breasts tissue). 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Understanding each organ specific cancer and the treatment available for it Breast Cancer It is the commonest of cancers affectingRead MoreBreast Cancer Diagnosis: The Psychosocial and Educational Needs1172 Words   |  5 PagesWhat are the psychosocial and educational needs of a breast cancer patient? In the United States, breast cancer is the most common form of cancer that women are diagnosed with (Stephens, Osowski, Fidale, Spagnoli, 2008). Those diagnosed tend to go through stages of fear, disbelief, shock, and sadness. â€Å"Nurses can improve the quality of care for women with breast cancer and their families by providing additional support services and post-treatment information during the initial education and follow-upRead MoreBreast Cancer Develops From The Breast Tissue1216 Words   |  5 PagesBreast Cancer Breast cancer develops from the breast tissue. It occurs when abnormal cells in the breast divide uncontrollably and form tumours. The tumours are either a lump or a thickening of body tissue. According to cancer research UK, in 2012, there was 50,750 new cases of breast cancer in women and 353 new cases of breast cancer in men, in the UK. There was also 11,716 deaths from breast cancer. (http://www.cancerresearchuk.org/health-professional/cancer-statistics/statistics-by-cancer-tRead More Women Coping with Breast Cancer Essay1688 Words   |  7 PagesCoping with Breast Cancer Coping has been closely connected to stress; it involves a process by which a person attempts to restore balance in response to a stressful life event (Henderson, Gore, Davis, and Condon, 2003). The most common cancer among Canadian women in 2010 is breast cancer. An average of 445 Canadian women will be diagnosed with breast cancer and an average of 100 Canadian women will die of breast cancer every week (Canadian Cancer Society, 2010). Coping with breast cancer has beenRead MoreThe Ethical Phenomenon Of Breast Cancer Screening And Treatments867 Words   |  4 Pagesboth the BRCA1 and BRCA 2 gene mutations and choosing bilateral mastectomies for early-stage breast cancers (Weintraub, 2015). Oncologists saw a 50% increase for risk-reduction mastectomy surgery related to the â€Å"Jolie Effect†. The impact of an actress, known for her beauty, to willing risk her body image to increase her lifespan survival has philanthropically advanced the issues surrounding breast cancer. Racial Cultural Williams, Templin, and Hines (2013) identified that some populations groupsRead MoreBreast Cancer Essay830 Words   |  4 Pagesearly breast cancer with 170 women providing complete interview data up to either five years after diagnosis or recurrence. The aim of this study was to examine the prevalence and risk factors for depression and anxiety in women with early breast cancer in the five years after diagnosis. The study used structured interviews and standardised diagnostic criteria to assess the point prevalence and period prevalence of clinically important depression and anxiety in women with early breast cancer in the

Foreign Direct Investment

Question: Evaluate the Cost and Benefit of Foreign Direct Investment and also Write Political,Economic and Legal System of this Assignment. Answer: Introduction Globalization and foreign direct investment is very critical terms which are in escapable as tools upon which US economy depends upon. In this report a complete study has been prepared over the cost and benefit analysis of foreign direct investment in USA economy. This report has been prepared to divulge how foreign direct investment has been providing benefits for the growth of USA economy. Foreign direct investment is a controversial issue in international economy around the globe. It is evaluated that how foreign direct investment has been playing a pivotal role in economy of USA in collection of foreign exchange. In the starting of this report changes in globalization has been portrayed in context with foreign direct investment in USA economy. Apart from that, Political, legal and economical factors of USA economy have been taken into consideration for evaluating the cost and benefits of foreign direct investment in determined approach. In the end of this report nexus has been es tablished between political, economical and legal factor of foreign direct investment in USA economy (Jayet Marchal, 2016). Political System Foreign direct investment is amount of investment made by foreign investors from the outside of selected country. It is the system which establishes relation between how formal and informal institutions by which government generate policies and rules to demand and assistance of general public. Total democracy has been followed by USA in its political system. Economy of USA is called developed economy and in order to increase its GDP rate Government of USA has opened its economy for the foreign investors (Hanemann, Gao, 2014). However, allowing FDI in USA economy will results into availability of funds for USA countries but it will eventually results into increment of control of outsiders in economy of USA It is further observed that Political stability of USA is also very effective which provides free flow of Foreign investment in USA country. There is several trade agreements, participation in international treaties and other regional blocks have been prepared by USA for encouragin g foreign direct investment. These impacts have divulged USA has made its economy a single global order mostly denominated by democracies and free market for foreign direct investment. Political stability in USA could be reflected with the help of given graph (Wei, Zheng, Liu, Lu, 2014). This graph depicts that USA has been maintaining stable political system. However, co- integration analysis between foreign direct investment and political overview of USA depicts that there exist a positive correlation between two factors. Government of USA has opened up its economy 100% for FDI purpose and allowing foreign investors to make investment in USA economy (Pan, Teng, Supapol, Lu, Huang, Wang, 2014). Therefore, USA has maintained its political stability throughout the time in order to attract foreign investment or more capital. Political system has been playing effective role in attracting FDI in USA. If country faces problem in their political system then it would result into emergence of situation when country would have no investment from foreign investors. Therefore it is evaluated that USA being developed economy has provided that country has been raising prepared their political system open and allowed foreign investors to make investment in determined approach (La mster, (2017). Legal System Legal system is consisted with all the policies, rules and regulation of the country. Foreign direct investment in USA is result of globalization. Economy of USA has reflected that legal system accompanied with laws, regulation and other rules enforceable on globalization has provided that company has allowed foreign investors to invest their money in USA capital market without any restriction. However, there are several sectors in which government of USA has imposed sectorals cap in determined approach. It is further observed that USA economy has widely changed its legal system and reduced its taxation, tariff on several factors. Foreign investors who are investing money in USA economy are aiding with leaving government support and least regulated policies of governments. Investment in intellectual property by foreign investors is encouraged by government parties in USA by abolishing of licensing in several fields, allowing foreign investment in small industries and other niche mark et, new trade policies and dismantling price control. Another major concern which has been seen in USA economy is related with corruption in legal system (Kim, Zychowicz, 2015). In order to attract more FDI and making countries risk free for the foreign investors USA government has prepared agenda to eradicate corruption from their legal system. Legal system of USA has encouraged several investors to make investment in selected sectors. However, there are other parts of economy where FDI by the USA government is not allowed such as hospitals, education and ammunition industry. Government of USA has been making effective efforts to attract more foreign investment by making liberal policies and making changes in their existing policies such as adoption of international policies and entering into regional blocks with countries (Perri Peruffo, 2016). Economic System United state has mixed economy. It is the system which is accompanied with laws and regulation that determine how resources in USA are being distributed for producing goods and service. U.S. economy is made of individual people, business and other factors as per the certain level of requirement of economy. Economical system of USA in context with FDI polices and regulation is open and allows foreign investors to invest their money in USA economy (Li, et al. 2016). However, there is several cost and benefit analysis which have been seen such as allowing FDI from foreign investors results in loss of control in several assets and resources of USA, incoming of notable entrepreneur and establishment of several big multinational companies around the globe. However, it is further observed that GDP of USA is 16.77 trillion USD in which around 15% partition is contributed by FDI and generated gross national income of country results into around 16.99 trillion USD due to wide level of investment of entity from outside of country. The main loss which has been observed is that stocks and goods offered by multinational company provide high competition to domestic business man those results into loss of their business functions (Boly, Coniglio, Prota, Seric, 2015). However, after making cost benefit analysis it would be concluded that FDI in USA results into several benefits such as it increase employment, arrangement of capital and other benefits with les s loss rendering activities. The main benefits of FDI could be reflected that People in USA are provided products and services in their own country as per their demand and need in determined approach (Gopinath, Helpman, Rogoff, (2014). Conclusion In this report it is observed that FDI is very essential for the development of particular economy. It is evaluated that FDI is influenced by mostly three factors of economy namely political, legal and economical factors. In order to identity the true benefits of FDI in country it is required to understand how these systems are influencing FDI. It is easy to say that country getting high FDI would results into development of its economy in short span of time. It could be reflected with the developed countries FDI policies and regulations. However, there are several benefits and losses which are associated with FDI in particular economy so proper due diligence need to be taken care while forming FDI policies by country. In the end it would be concluded that each and every organization should encourage FDI policies for the effectiveness of their international relation with other countries. References: Boly, A., Coniglio, N. D., Prota, F., Seric, A. (2015). Which domestic firms benefit from FDI? Evidence from selected African countries.Development Policy Review,33(5), 615-636. Gopinath, G., Helpman, E., Rogoff, K. (Eds.). (2014).Handbook of international economics(Vol. 4). Elsevier. Hanemann, T., Gao, C. (2014). Chinese FDI in the US: 2013 Recap and 2014 Outlook.Cross Border Investment. https://www. uschina. org/sites/default/files/RHG_XBI_ChineseInvestmentInUS_2013_ Recap_6Jan2014. pdf. New York: Rhodium Group, LLC. January,6. Jayet, H., Marchal, L. (2016). Migration and FDI: Reconciling the standard trade theory with empirical evidence.Economic Modelling,59, 46-66. Kim, W. S., Lyn, E. O., Zychowicz, E. J. (2015). Is the source of FDI important to emerging market economies? Evidence from Japanese and US FDI. Lamster, I. B. (2017). Implications of the 2016 FDI Policy Statements.International Dental Journal,67(1), 3-3. Li, L., Wang, H., Jin, H., Cao, Z., Feng, N., Zhao, Y., ... Yan, F. (2016). Interferon-inducible GTPase: a novel viral response protein involved in rabies virus infection.Archives of virology,161(5), 1285-1293. Pan, Y., Teng, L., Supapol, A. B., Lu, X., Huang, D., Wang, Z. (2014). Firms FDI ownership: The influence of government ownership and legislative connections.Journal of International Business Studies,45(8), 1029-1043. Perri, A., Peruffo, E. (2016). Knowledge spillovers from FDI: a critical review from the international business perspective.International Journal of Management Reviews,18(1), 3-27. Wei, Y., Zheng, N., Liu, X., Lu, J. (2014). Expanding to outward foreign direct investment or not? A multi-dimensional analysis of entry mode transformation of Chinese private exporting firms.International Business Review,23(2), 356-370.

Tourism in Australia

Although tourism has been an economic factor in Australia for a very long time, nowadays it has expanded to the level that it is acknowledged as the main source of employment and economic activity. In the past decades, the country has witnessed a substantial growth in the number of international tourists. With this growth, the need for sustainable development in tourism industry has been a concern.Advertising We will write a custom report sample on Tourism in Australia specifically for you for only $16.05 $11/page Learn More Sustainable development is defined as a growth that satisfies peoples’ wants without compromising on the future generation’s wants (Rogers Jalal 2008, p. 42). Based on this definition, sustainable development should be able to satisfy the economic and social needs of the people with the regenerative capacity of the natural environment. Through sustainable development initiatives, the tourism industry has been encourage d to reduce their negative impacts on the environment and the local cultures. This report focuses on Kakadu National Park. Through the report, social, economic, and environmental impacts that will result from an increased in the number of tourists visiting the area in the future are highlighted. The report identifies tourism stakeholders in the region, their attitudes towards the growth, and recommends ways for ensuring the sustainability in the industry. Kakadu National Park is situated in northern Australia. The national park was established in the early 1960s. For the last few decades, tourism has created a significant disadvantage for the Aboriginal people in the area. From the time it was created, Kakadu has been a centre of attention between environmentalists, tourism stakeholders, and the miners situated in the region. In the last decade, the number of domestic and international tourists has significantly increased. As the number of tourists increases, the need for adoption o f sustainable tourism policies in the region increases. With the increase in the number of tourists, more economic activities and employment opportunities will be created in the region. More Australians will be employed to work in the booming tourism industry. Notably, the indigenous Aboriginal people will benefit financially from the influx of tourists in the area. As such, they will be employed by the tourism industry to work as guides and informants. Equally, some entrepreneurs among this minority community will get an opportunity to open their own tourism enterprises. The community’s produce such as paintings, carvings, and other artefacts will be sold in large quantities increasing their revenues. Not only will the local community benefits from the increase in the number of tourists, but the government also will benefit because international tourists destined for the region will enhance foreign exchange.Advertising Looking for report on communications media? Let's see if we can help you! Get your first paper with 15% OFF Learn More In the last three decades, cultural changes have been witnessed in the region because of the establishment of a national park. Throughout this period, the deaths of traditional owners of the region and the rise on new owners with at little educational backgrounds have been witnessed. Notably, these individuals remember little of their historical background. Therefore, in the future when the number of tourists increases the Aboriginal culture will be at risk of being extinct (Nile 2008, p. 45). With the increased number of tourists, social amenities, new technologies, schools, and hospitals will be created. This will aid in the degradation of Aboriginal culture. Currently, most Aboriginal individuals employed in the tourism industry live around the parks, travel using vehicles, shop, and ride in the same boats as their white counterparts. This is a clear indication that in the near future, when the number o f tourists will have increased, these individuals will adopt their white counterpart’s culture. According to the Aboriginal history, it is alleged that the ancestors of the modern Aborigines used to lit fires in the region during the cooler months as a way of appreciating the ownership of their land (Keen 2010, p. 174). Because of the collapse of Aboriginal culture, the habit has now become extinct. Backed by the western science, park managers have been simulating these fire regimes with the use of helicopters dropping small fires as they fly across the park during the cooler months. More often, some Aboriginal people have tried to mimic or rebel these simulations during the hot seasons resulting in huge fires that burn for several weeks. With the increase in the number of tourists in the future, more simulations will be carried out. In return, more people that are indigenous will set up more fires as a revolt to the simulations. These fires will cause huge environmental loss es as they have done in the past. Vegetation cover will be destroyed as well as the animals that depend on them. By building social amenities in the region, land animals and migratory paths will be destroyed endangering their future survival. The main stakeholders in the region are the Aboriginal community, tourism investors, and the government. Tourism investors are excited about the projected growth. The growth will see an increased number of tourists visiting the region, increased in number of investments, increased business opportunities, and increased returns. With the projected growth, the Aboriginal landowners and authorities are worried about their traditional clan estates and their cultures. Some of them have foreseen the effects and the conflicts that will result from the expected growth of tourism in the region.Advertising We will write a custom report sample on Tourism in Australia specifically for you for only $16.05 $11/page Learn More Cur rently, the Aboriginal share of the tourism economy is very small. This implies that ownership issues will increase in the near future. On the other hand, the government has admitted that in the future the Aboriginal share in the tourism industry in the region must be recognized. This implies that in the upcoming years the government will fight for the Aboriginal community to be part of the park’s plans. For sustainable tourism development in the region, the stakeholders must ensure that the needs of the indigenous communities, their culture, and their history are given the top priority in the growth of the sector (Newsome 2002, p. 241). If the Aborigines are taught on the need to preserve their culture and be made to feel that they are part of the industry, more conflicts and cultural losses will be avoided in the future. Therefore, the stakeholders must be ready to enhance cultural reinforcement and environmental preservation policies in the region. Equally, the stakeholder s should increase the Aboriginal community’s shares in the industry. On the other hand, the government should enforce a law that will mandate the tourism industry in the region to adopt renewable sources of energy in the park. Through this, pollution will be curbed. Tourists visiting the region should be given brochures encouraging them to conserve the environment in and outside the park. When the indigenous Aboriginal community will be able to manage the development process, preserve their culture, preserve their environment and economy, sustainable tourism development will be achieved in the region for the benefit of all the stakeholders and the future generation. References Keen, I, 2010, Indigenous participation in Australian economies: historical and anthropological perspectives, ANU E Press, Acton, A.C.T. Newsome, D, 2002, Natural area tourism ecology, impacts, and management, Channel View Publications, Clevedon.Advertising Looking for report on communications media? Let's see if we can help you! Get your first paper with 15% OFF Learn More Nile, R, 2008, Australian Aborigines, Wayland, London. Rogers, P, P, Jalal, K, F, 2008, An introduction to sustainable development: Earthscan, London. This report on Tourism in Australia was written and submitted by user Lucille Kinney to help you with your own studies. 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