Case study 2023 Business Finance

2023 What factors underlay the decision by Volkswagen to invest directly in automobile production in


  1. What factors underlay the      decision by Volkswagen to invest directly in automobile production in      Russia? Why was FDI preferable to exporting from existing factories in      Germany? 
  2. Which theory (or theories) of      FDI best explain Volkswagen’s FDI in Russia? 
  3. How do you think FDI by foreign      automobile companies might benefit the Russian economy? Is there any      potential downside to Russia from this inflow of FDI? 
  4. Russia is largely dependent on      oil exports to drive its economy forward. Given the sharp fall in global      oil prices that occurred in 2014 and 2015, what impact do you think this      will have on FDI into Russia? 
  5. Volkswagen has signaled that it      is going to stay the course in Russia, despite current political and      economic headwinds. Why do you think it made this decision? What are the      pros and cons of this decision? In your opinion, is it the correct      decision?

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