4. AMK Laboratories is a U.S.-based medium-sized firm that makes and sells oscilloscopes, logic analyzers, and other test and measurement equipment. Producing such equipment is complex, and necessitates skilled workers with substantial knowledge of high-tech electronic design and manufacturing. AMK management wants to increase sales of its equipment in Europe and is thinking of establishing a factory in Poland via foreign direct investment (FDI). AMKs costs of R&D and capital equipment are substantial and the firm needs to recoup these costs, as well as the costs of its FDI, as quickly as possible. Suppose they hire you as a consultant and ask you to development a plan for the proposed Poland venture. In the process, you are asked to explain the following topics:

(a) Briefly describe the following two forms of FDI: acquisitions and greenfield investments.

(b) Why do firms engage in FDI? In answering, be sure to include discussion of Dunnings Eclectic Paradigm.

(c) What advantages are FDI and establishing a factory in Poland likely to provide AMK, as compared to simply exporting their equipment to Europe?

(d) What are the likely advantages to Poland of AMKs proposed investment in that country?