Analyzing the Investment Potential of a Country
You are scouting new markets for your company. The company would like to move all or part of its operations to a developing country to save resources. It is your task to evaluate the investment potential of two countries. You should display your data in a set of infographics (posters), along with the pros and cons of the possible market, and impact on the people and culture. Infographics provide a means of showing large amounts of data and information in a quick, easily accessible format.
At the end of the term you will present your findings to the class by sharing your collection of infographics, which tell the stories of your countries and graphically displays the information that you used to make your scouting decision.
You should have a set of 3 to 5 infographics for each country that you considered in depth that includes the following variables, (which are explained in more detail below):
- Structure of the Economy
- Economic Indicators
- Health Indictors
- Education
- Governance Indicators
The list of countries classified by region and by income is provided below and can be found at: List of Countries
Please note the following:
- The two countries chosen cannot be from the same region
- Each of the countries chosen must come from one of the following income categories: Lower Income; Lower Middle Income, and Upper Middle Income.
Please note that you cannot choose more than ONE country from each region and you can only use countries from the list of countries provided. When choosing the countries, also make sure the country you are selecting has most of the data you need. You will lose points for choosing a country with hardly any data for the years of coverage.
Project Guidelines
The period of data analysis must cover 5 years (periods) starting not earlier than 1990 and ending in the most current year or the year prior to the current year. This means, for example, that you are required to choose 5 years, well-dispersed between 1990 and 2018. Please refrain from using 5 contiguous years, as the variables may not show significant (noticeable) fluctuations from year to year.
A good example for selecting the period of coverage is: 1990; 1995; 2005; 2010; 2015.
*Note for each variable analyzed, if you are not able to find data for a specific year under consideration, feel free to use data for a year or two prior or after that specific year.
Variables
- Structure of the Economy (Latest Year Only):
- Use the following variables to provide a broad economic overview of the country for the latest year for which data is available.
Discussion Points: Briefly comment on the development status of each country depending on the magnitude of a particular sector in the structure of the economy. For example, an economy dominated by manufacturing or industry is likely to be a developed or an industrialized economy.
- Services
- Manufacturing or industry
- Agriculture
Example:
Sample Answer to Discussion Points: The graphs show that the development status of Country A is lower than Country B because the structure of the economy is dominated by agriculture.
- Analyze the share of Exports as a Percentage of GDP for each of the two countries, for the years under observation. The data can be found at: World Development Indicators (World Bank) Data Set .
Detailed Instructions on navigating WDI indicators will be provided.
- Economic Indicators:
Provide data for the period of coverage for each of the two countries selected (required).
- Interest rate
- Exchange rate
- GDP per capita growth – annual %
- Consumer Price Index
- Unemployment, total (% of total labor force)(modeled ILO estimate)
Discussion Points:
- After specifying the economic indicators for each country, provide a brief explanation of these factors listed above affect trade flows.
- Health Indicators (all required)
Provide data for the period of coverage for each of the three countries selected.
- Life expectancy
- Under 5 or child mortality rate
- Domestic general government health expenditure (% of GDP)
- Education (all required)
- Government expenditure on education as a % of GDP
- Adult literacy rate
- Educational attainment, at least completed upper secondary, population 25+ years, total (%) (cumulative)
Discussion Points: One of the key considerations of an MNC in determining an investment destination is the human capital of the workforce of the country. Human capital is determined by the health, the educational attainment, the skill set and the health status of the labor force. Use the information obtained in your analysis in part 3 and 4 to comment on the human capital potential of the countries you are analyzing.
- Governance Indicators (Please familiarize yourselves with the meaning of each of the indicators chosen (you are required to use only 3 of the following variables). You can, however, use them all if you want.
- Political Stability and Absence of Violence/Terrorism: Percentile Rank (required)
- Rule of Law: Percentile Rank (required)
- Control of corruption: Percentile Rank (required)
- Voice & accountability (not required)
- Government Effectiveness (not required)
- Regulatory quality (not required)
The Governance Indicators can be found at the World Bank Institute at the following site: World Development Indicators (World Bank) Data Set .
Discussion Points: A review of the governance indicators of a country factors significantly in the decision of an MNC to extend its operations to a particular country. Use the information obtained in your analysis in part 5 to measure the investment climates of the countries you are analyzing.