Understanding Foreign Direct Investment (Fdi)

This article was written by Jeffrey P. Graham and R. Barry Spaulding and originally appeared on the now defunct Citibank international business portal. Copyright © Citibank. all in all Rights Reserved. Understanding Foreign Direct Investment (FDI) Definition Foreign orient investment (FDI) plays an extraordinary and growing role in world-wide business. It can provide a unfluctuating with new markets and marketing channels, cheaper production facilities, access to new engine room, products, skills and financing. For a host rural area or the foreign firm which receives the investment, it can provide a source of new technologies, capital, processes, products, organizational technologies and charge skills, and as such can provide a strong impetus to economic development. Foreign direct investment, in its classic definition, is defined as a company from one country making a physical investment into building a factory in another country. The direct investment in buildings, machinery and equipment is in demarcation with making a portfolio investment, which is considered an indirect investment.

In recent years, stipulation rapid growth and change in global investment patterns, the definition has been broadened to include the acquisition of a lasting management interest in a company or opening move outside the investing firms home country. As such, it may take many forms, such as a direct acquisition of a foreign firm, construction of a facility, or investment in a joint gauge or strategic alliance with a local firm with attendant input of technology, licensing of intellectual property, In the past decade, FDI has take to play a major role in the internationalization of business. Reacting to changes in technology, growing liberalization of the national regulatory mannikin governing investment in enterprises, and changes in capital markets dusky changes have occurred in the size, scope and methods of FDI. New information technology systems, decline in global communication costs... If you want to pop out a full essay, order it on our website: Orderessay

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