INVESTMENT AND TECHNOLOGY

ABSTRACT
All countries require investment, the guidelines to be tarted will be shown at the beginning
of the text. It will be explained what investment is, and why it is related to technology.
From this, some characteristics will be exposed that will offer a better panorama. As we
know, Germany will be mentioned as a supremely interesting country. Some authors will
contribute with relevant ideas for the better understanding of the topic that is being
discussed.

INTRODUCTION
The investment is about giving something with the promise that this will give us a much
greater profit. For countries, investing in other countries shows how advanced or developed
they are. This requires opportunities of investment. “An investment opportunity is a call
option on future cash flows. Firms usually have a target debt in financing such
opportunities. In addition to this explicit one, there exists another leverage related to the
real call option” (Kenc & Driver, 2020, p. 2). “According to the asymmetric theory of
investment, imperfections in the financial markets lead firms to face varying degrees of
financing constraints and therefore undertake varying levels of investments” (Zubair, Kabir
& Huang, 2020, p.456).
INVESTMENT IN GERMANY
“Foreign direct investment flowing to developing country economies takes at least four
distinct forms: FDI in extractive industries; FDI in infrastructure; FDI in manufacturing and
assembly; and FDI in services” (Moran, 2012). There is also the portfolio investment, that
is the ownership of a financial asset that will record more income or its value will grow as
time passes. The foreign portfolio investment of Germany, is rather negative, since in 2019
this fell significantly. “CEIC calculates quarterly Foreign Portfolio Investment in USD
from monthly Foreign Portfolio Investment. Deutsche Bundesbank provides Foreign
Portfolio investments in EUR. Federal Reserve Board average market exchange rate is used
for currency conversions” (CEIDATA, 2019).
Another important factor that drives investment is technology. In a typical model of
technology diffusion, the rate of economic growth of a backward country depends on the
extent of adoption and implementation of new technologies that are already in use in
leading countries.” (Borensztein De Gregorio & Lee, 1998). The expansion of technology
has various distribution channels, which involve the development of ideas and innovation.
In addition to all these channels, foreign direct investment by large organizations is
considered to be one of the most important annals for technological expansion, since this
covers many more countries and also the need for competitiveness. “The higher the real per
capita GNP and the lower the balance of payments deficit are, the more foreign direct
investment is attracted.” (Schneider & Frey, 1985).
Given that the ways to diversify production in countries where investment is attracted by
various factors already mentioned above. “shown that when domestic investors possess a
cumulative information advantage over foreign investors about their domestic market”
(Brennan & Cao, 1997). That's why you can see several ways of modernization through the
investment generated by the host country and which is feasible for companies interested in
it. “FDI inflows exert a positive influence on technological upgrading over a lengthy time
period for a large and diverse sample of countries” (Kemeny, 2020).
Conclusion
Simply put, a country needs the foreign investment it generates through the causes already
discussed above, where foreign companies see ideal growth for their industry in that
destination country. “inflow of foreign direct investment and barriers to technological
adoption affect the likelihood of individuals' entry into technology entrepreneurship”
(Pathak, Xavier-Oliveira & Laplume, 2013). And technology plays a fundamental role in
the transformation of the industry 4.0 therefore “inflow of foreign direct investment and
barriers to technological adoption affect the likelihood of individuals' entry into technology
entrepreneurship” (Pathak, Xavier-Oliveira & Laplume, 2013).

References
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Economics.
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