Quote: "A foreign direct investment (FDI) refers to purchase of an asset in another country, such that it gives direct control to the purchaser over the asset (e.g. purchase of land and building)."
Investment by a company in a foreign country in the form of a subsidiary, acquisition, or greenfield investment.
Definition of Foreign Direct Investment: Understanding what Foreign Direct Investment (FDI) is and its nature of cross-border investment by a company or individual, resulting in control or significant influence over a foreign entity.
Types of Foreign Direct Investment: Knowing the two broad categories, namely inbound and outbound or greenfield and brownfield investment, based on the investing and receiving country's perspectives.
Economic Growth: The impact of FDI on a country's economy can be significant, including job creation, technology transfer, and access to capital, leading to economic development and growth.
Multinational Corporations: MNCs are key players in driving FDI, and understanding their structure, strategies and drivers, and their relationship with the host country is essential.
Market Entry Strategies: Exploring the different market entry strategies, such as mergers and acquisitions, joint ventures, strategic alliances, and greenfield investments and their benefits, risks and implications.
International Trade Policies: Analysing the role of government policies, tariffs, regulations, and incentives in the FDI process, and the impact of globalization on investment patterns.
Host Country Factors: Identifying the factors that attract foreign investment, such as the size of the market, labour costs, infrastructure, political stability, and legal framework, among others.
Investment Location Analysis: Evaluating the location attractiveness, including the comparative advantages of the investing and receiving countries, to make informed investment decisions.
Cultural Differences: Understanding the cultural differences that exist between countries and their impact on foreign investments, particularly relating to communication, management styles, and negotiation.
Risks and Challenges: Analysing the potential risks, including political, financial, legal, environmental, and operational risks, associated with FDI, and how to mitigate them.
Cross-cultural Negotiation: Developing the skills and strategies to negotiate effectively with foreign partners, including understanding the cultural norms and adjusting accordingly.
Corporate Social Responsibility: Examining the ethical and societal obligations that MNCs and investors have towards employees, communities, and the environment in the host country.
Investment Promotion: Understanding the role of investment promotion agencies (IPAs) in facilitating FDI, including their strategies, structures, challenges, and approaches to attracting foreign investors.
Investment Incentives: Analysing the various incentives offered by host countries, such as tax breaks, grants, and subsidies and evaluating their effectiveness in attracting FDI.
Performance Evaluation: Assessing the impact of FDI on the host country's economy, including employment, income, trade, and productivity, and evaluating the performance of the investing company.
Greenfield investment: A foreign company establishes a new subsidiary, branch or office in another country, often involving significant investment in physical infrastructure such as buildings, machinery, and equipment.
Acquisitions: A foreign company acquires an existing company or controlling stakes in another company in another country.
Joint ventures: A foreign company and a local company in another country form a new venture with shared ownership and control.
Mergers: A foreign company merges with an existing company in another country to create a new company with a common ownership structure.
Strategic alliances: A foreign company engages in a partnership agreement with a local company in another country, sharing resources, technology, and expertise to achieve common objectives.
Management contracts: A foreign company provides management expertise and support to a local company in another country, typically on a fee or contract basis.
Franchising: A foreign company licenses its brand, products, and services to a local company in another country to market, distribute, and sell the products and services.
Turnkey projects: A foreign company delivers a complete project or system to a local company in another country, including engineering, procurement, construction, and commissioning.
Portfolio investments: A foreign company buys stocks, bonds, or other securities issued by companies in another country, without having controlling ownership or management control.
Exporting: A foreign company sells products or services directly to customers in another country, without having any physical presence or investment in that country.
Quote: "Purchase of land and building."
Quote: "It is thus distinguished from a foreign portfolio investment or foreign indirect investment by a notion of direct control."
Quote: "It is an investment in the form of a controlling ownership in a business."
Quote: "An investment in the form of controlling ownership in... real estate."
Quote: "An investment in the form of controlling ownership in... productive assets such as factories."
Quote: "By an entity based in another country."
Quote: "The investment may be made either 'inorganically' by buying a company in the target country..."
Quote: "The investment may be made... 'organically' by expanding the operations of an existing business in that country."
Quote: "The origin of the investment does not impact the definition, as an FDI..."
Quote: "An investment in the form of... purchase of land and building."
Quote: "Such that it gives direct control to the purchaser over the asset."
Quote: "It is an investment in the form of a controlling ownership in a business."
Quote: "An investment in the form of... real estate."
Quote: "An investment in the form of... factories."
Quote: "...distinguished from... foreign indirect investment by a notion of direct control."
Quote: "...distinguished from a foreign portfolio investment... by a notion of direct control."
Quote: "The investment may be made either 'inorganically' by buying a company in the target country."
Quote: "The investment may be made... 'organically' by expanding the operations of an existing business in that country."
Quote: "By an entity based in another country."