It is widely believed that in countries with a poor control environment (eg, weak legislation and corruption) not to attract foreign direct investment (FDI), but this study suggests otherwise. Use China as an example, this article argues that the prevailing theory that the effective management of the environment generates FDI is incomplete. When faced with poor management environment, investors choose direct investments indirect (portfolio) investments, because the former can be better protected by private funds. In fact, China has attracted a large number of foreign direct investment because of, not despite, the lack of good management environment. Offer better protection of investment strategies and look at the pitfalls resulting from rapid changes in the management environment. "Hide
by Shaomin Li Source: Business Horizons 6 pages. Publication Date: July 15, 2005. Prod. #: BH125-PDF-ENG
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