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Medium Foreign Direct Investment Economic Policy Public Sector Strategy

Emerald City

#Public Sector #Economic Development
ProHub Comment

This is a public sector FDI case that requires candidates to diagnose declining foreign investment by analyzing internal city characteristics, macroeconomic factors, and geopolitical conditions. The case progresses from diagnosis (Question 1) through quantitative analysis of growth potential against a stated goal (comparing $60B target against projected $54B growth), to benefits/risks assessment (Question 2), and finally to stakeholder communication (Question 3).

Estimated Time 15 minutes
Difficulty Medium
Source Darden
50 / 100
Your client is the mayor of Emerald City - a large, metropolitan US city (i.e. New York or Los Angeles). She has noticed that Emerald City’s FDI levels– foreign direct investment – have been decreasing over the past year. The mayor wants to turn this trend around. What are the main factors she should consider as causes of the decline?

Clarifying Information

  1. What is FDI? Foreign direct investment is an investment made by a firm or individual in a foreign country into businesses located in the country of interest. Generally, FDI takes place when an investor establishes foreign business operations or acquires foreign business assets (as opposed to equity purchases).
  2. Why does the mayor want to increase FDI? She is interested in the foreign income opportunities, as well as the benefits to Emerald City’s population.
  3. What foreign entities currently invest in Emerald City? Foreign investors into Emerald City include firms from a broad range of markets, from mature economies such as the EU and China, to emerging economies such as Brazil and India.
  4. What is the goal/target? A $60 billion increase in FDI over the next 2 years.
  5. [Any other question – e.g. “what are Emerald City’s major industries”] Whatever you want them to be/we don’t have information on that.