I don’t have personal experience with this type of CBA so I can’t say for sure whether the investment by an unsuccessful NZ bidder should be included. It is arguable that home bias effects could cause Fay to be more likely to invest in NZ, but that may depend upon the allegiances of his consortium and who is financing it, too. Even if the home bias caused some of the money available for this bid to be invested elsewhere in NZ, it may then drive out other investment, rather than being truly additional. It’s not as though NZ has a problem accessing international capital markets so it’s also dubious whether the investment would cause a welfare increase, even if it was additional.

Overall, I’d say it’s probably not going to be an effect that would change the ranking of options in a CBA; although, at this point, I’m completely making things up 😉

Presumably an unsuccessful NZ buyer with capital is far more likely to invest that capital in NZ in another investment rather than a prospective Chinese investor.  So foriegn investment, even if it does exactly the same thing as an NZ investor would, will likely lead to an increase in aggregate investment in NZ.  Or am I missing something?