Explain how would this related to Saudi firms invested on other countries?Do you think this theory applied to Saudi firms or they usually invest on western countries?

Finance by Geoffrey

International Finance

Question 1 (5 points): There are two theories related to where Foreign Direct Investment (FDI) would be invested; one of them is behavioral approach; it is that firms first invest into closer countries which is considered as synch.Explain how would this related to Saudi firms invested on other countries?Do you think this theory applied to Saudi firms or they usually invest on western countries?

Question 2 (5 point): Would you think a local firm’s action of merging with an international firm justifiable to increase its concentration on the industry globally?For example, if one of the Saudi banks (i.e. Bank AL Rajhi) merge with some other international bank (i.e. First Abu Dhabi Bank) to have higher level of market share in the banking industry.Discuss.