Globalization and Foreign Investment
This lesson plan is divided into two activities. The Introductory Discussion provides context and vocabulary for the lesson and Activity i provides an application activity for extension of the concepts learned in the lesson. Activity 2 is intended to raise student awareness of the lesson subject, to introduce larger concepts, and to pose challenging questions.
Copies of Handouts 1, 2 and 3: "Questions on Foreign Investment Reading"; "Advanced Discussion Questions"; and "Investment Scenario"
Investment Brief sections:
"Introduction"; "Why do Companies Invest Overseas?"; "Concerns about Shifting Production Due to Foreign Investment"; "What Are the Different Kinds of Foreign Investment?"; "Differences Between Portfolio and Direct Investment"; and, "Why has Foreign Investment Increased so Dramatically in Recent Decades?"
Introductory Discussion and Activity 1
Have students read the Investment Brief sections entitled "Introduction," "Why Do Companies Invest Overseas?" and "Concerns about Shifting Production Due to Foreign Investment," either in-class or as homework.
Start the lesson with a brief review of key investment terms discussed in the reading and in the Introductory Activity. Students need a firm grasp of the broad concepts of investment prior to learning more specific nuances. Prior to moving forward, be sure that students understand the basic dynamics of foreign investment, that companies choose to invest in other countries for a variety of economic reasons, and that a closer review of an often-articulated argument against foreign investment provides a balanced perspective.
Distribute Handout i with discussion questions on the nature of foreign investment. The questions are divided into three subsets, corresponding to different portions of the Investment Issue Brief: "What Are the Different Kinds of Foreign Investment?"; "Differences Between Portfolio and Direct Investment"; and, "Why Has Foreign Investment Increased So Dramatically in Recent Decades?"
Students will answer the questions in a "jigsaw" exercise. Divide students into groups of threes, and assign each student to respond to one subset of questions. Each student will then share his or her answers with the other students in the group. Each group should then present its answers to the class.
You may conclude with one of two options. First, you may summarize the discussion, drawing student attention back to the student objectives, checking for knowledge, and then providing a concluding assessment activity (if necessary).
Alternatively, you may assign the students the questions from Handout 2 to respond to as homework or as an in-class writing assignment. (The first two questions are also provided on the website.)
This lesson plan and accompanying Investment Brief is reprinted with permission from Globalization101.org, a project of the Carnegie Endowment. It has been abridged for the purpose of publication.
When people think about globalization, they often first think of the increasing volume of trade in goods and services. Trade flows are indeed one of the most visible aspects of globalization. But many analysts argue that international investment is a much more powerful force in propelling the world toward closer economic integration. Investment, often alters entire methods of production through transfers of know-how, technology and management techniques, and thereby initiates much more significant change than the simple trading of goods.
Over the past l0 years, foreign investment has grown at a significantly more rapid pace than either international trade or world economic production generally. From 1980 to 1998, international capital flows, a key indication of investment across borders, grew by almost 25 percent annually, compared to the 5 percent growth rate of international trade. …