Essay about FOREIGN DIRECT INVESTMENT

English_Master August 8, 2016 No Comments
FOREIGN DIRECT INVESTMENT Definition Foreign direct investment (FDI) is direct investment into production in a country by a company located in another country, either by buying a company in the target country or by expanding operations of an existing business in that country. The foreign direct investment generally encompasses the transfer of technology and expertise, and participation in the joint venture and management. Foreign direct investment is done for many reasons including to take advantage of cheaper wages in the country, special investment privileges such as tax exemptions offered by the country as an incentive to gain tariff-free access to the markets of the country or the region. Entities making direct investments typically have a significant degree of influence and control over the company into which the investment is made. Open economies with skilled work forces and good growth prospects tend to attract larger amounts of foreign direct investment than closed, highly regulated economies. The foreign direct investment is profitable both to the country receiving investment (foreign capital and funds) and the investor. For the investor company, FDI offers an exclusive opportunity to enter into the international or global business, new markets and marketing channels, elusive access to new technology and expertise, expansion of company with new or more...
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