Solution of the Discussion Questions
1. The shift toward a more liberal attitude accelerated under Mitterrand’s successor, Gaullis Jaqus Chairac. Chairac, who espoused a free market philosophy with a unique France twist, made encouraging inward investment in priority. The results have been striking.
France’s policy toward inward foreign direct investment began to change although France socialist president, Francois mitterrand, remained suspicious of direct investment by foreign firm, his successive administrations reduced the bureaucratic obstacles to foreign investment and created a more coherent mechanism for luring inward investment.
2. The benefit to the France economy of Toyota’s investment in France are:
• Creation of job
• Transfer of valuable technology
• Increase of export that would bolster France’s balance-of payment position.
3. Under European Union regulations and allowing Toyota to circumvent import duties. By 2001, some 2,000 people were employed at the new plan, and 2,000 job are estimated to have been created among suppliers. Toyota has been exporting output from the plan the other countries within the European Union, helping France balance of trade position.
4. Toyota chose France over the United Kingdom As located for its new plan because of many factors:
• The company hoped that its new plan would help it to increase its market share in France
• The country has long had an indigenous automobile industry, which yields an equate supply for trained of trained labor and technical experience, along with a network of experienced subcontractors
• The France government reportedly offered considerable subsidies to reduce Toyota to invest in country, these included tax breaks, the waiving of some social security contributions, and financial aid for training the workforce. Waived or significantly reduced the annual property tax on the site.
• The property of establishing a presence not only within European’s single market, but also within the euro single currency zone.