Essay on Foreign Direct Investment

Essay on Foreign Direct Investment

Length: 1433 words (4.1 double-spaced pages)

Rating: Powerful Essays

Open Document

Essay Preview

Foreign direct investment(FDI) is a financing made by an organization or substance situated in one nation, into an organization or element situated in an alternate nation. Remote immediate ventures contrast significantly from aberrant speculations, for example, portfolio streams, where in abroad organizations put resources into values recorded on a country's stock trade. Substances making immediate ventures normally have a critical level of impact and control over the organization into which the speculation is made. Open economies with gifted workforces and great development prospects have a tendency to pull in bigger measures of remote immediate financing than shut, exceedingly controlled economies.

Foreign direct investment (FDI) plays an uncommon and developing part in worldwide business. It can furnish a firm with new markets and promoting channels, less expensive preparation offices, access to new engineering, items, aptitudes and financing. For a host nation or the remote firm which gets the financing, it can give a wellspring of new advances, capital, forms, items, authoritative innovations and administration aptitudes, and accordingly can give a solid driving force to budgetary improvement.Foreign direct investment, in its excellent definition, is characterized as an organization from one nation making a physical investment into building a processing plant in an alternate nation. The foreign investment in structures, hardware and gear is interestingly with making a portfolio venture, which is viewed as an aberrant financing. Lately, given fast development and change in worldwide financing examples, the definition has been widened to incorporate the securing of an enduring administration premium in an organization or ...

... middle of paper ...

... that rose in the early 1980s(moosa, 2003), additionally Lipsey (2001) contends that FDI has been the most trustworthy wellspring of outside speculation in creating nations, so hence Nigeria and Africa on the loose is not a special case to each one of those nations who are striving to verify FDI is pulled in at all expense, on the grounds that further research has demonstrated that FDI will keep on assuming a critical part all hands on deck exercises around the globe and thus understanding the fundamental patterns and reason behind this expanded movement is vital to settle on powerful business choices on the best way to best participate in further worldwide expansion(floyd and Summan, 2007) Nigeria as a nation given the high vicinity of regular assets it have and the expansive business size it depicts has been the key motivation behind why the nation has been one of

Need Writing Help?

Get feedback on grammar, clarity, concision and logic instantly.

Check your paper »

Foreign Direct Investment ( Fdi ) Essay examples

- ... The theoretical model states trade openness, exchange rate and financial development as determinants of FDI Fedderke and Romm (2006) investigated the growth impact and determinants of FDI in South Africa from 1956–2003. Positive technological spillovers from foreign to domestic capital were found with FDI in South Africa tending to be capital intensive, suggesting horizontal FDI. The trade openness of the economy also impacted strongly on FDI with increasing imports lowering FDI and increasing exports raising FDI....   [tags: Investment, Foreign direct investment]

Powerful Essays
838 words (2.4 pages)

Essay on Foreign Direct Investment ( Fdi )

- Concept: Foreign Direct Investment (FDI) Flow of money for the purpose of investments from one country to another country is called as Foreign Direct Investments. It is an investment made by a company based in one country for long lasting interest or controlling stake into a company in a foreign country. The nature of FDI could be either be inward or outward. Inward FDI refers to direct investments flowing into the home country from foreign land, and outward FDI refers to home country making direct investments in foreign land....   [tags: Foreign direct investment, Investment]

Powerful Essays
1785 words (5.1 pages)

Essay on Current Foreign Direct Investment Fdi

- ... General Electric Co. agreed to sell its home-appliances business to Qingdao Haier Co. for $5.4 billion and billionaire Wang Jianlin’s Dalian Wanda Group Co. agreed to spend as much as $3.5 billion to take over the Legendary Entertainment production house (as stated in the article). Both of these are M&A type of FDI rather than Greenfield FDI. Additionally, we considered two main types of FDI, which are horizontal FDI and vertical FDI. Horizontal FDI happens when the affiliate replicates the production process (that the parent firm undertakes in its domestic facilities) elsewhere in the world ....   [tags: Investment, Foreign direct investment]

Powerful Essays
702 words (2 pages)

A Methodological Critique of Foreign Direct Investment in Development Countries

- Many writers have tried to figure out if there is a direct link between Foreign direct investment (FDI) and economic growth of an economy in terms of Gross domestic product (GDP) but a reliable procedure hasn’t been found yet. Sharma (2008) tends to assume that if more investments take place in developing Countries then there will be an augmenting effect on the economy and likewise if there is little or no FDI then there will be a growth retarding effect. The first part of the paper tries to see what other authors have to say though we have limited articles regarding Foreign direct investment and economic growth if it has a positive or negative effect, the second part tries to see the metho...   [tags: Foreign Direct Investment, government,]

Powerful Essays
994 words (2.8 pages)

Foreign Direct Investment in Myanmar Essay examples

- Foreign Direct Investment in Myanmar (Graphics not Included) Since 1962 the Burmese government has been under military rule (Country Profile, 2007). The lives of the Burmese citizen are dictated by the totalitarian style of government which led to horror and starvation, causing numerous protests against the government. The latest protest in 2007 was planned and organized by the same student groups which took part in the similar protest earlier in 1988. The first protest was held on 15 September 2007 with protesters protesting on streets in Yangon on nearly a daily basis....   [tags: FDI Foreign Direct Investment]

Free Essays
1969 words (5.6 pages)

The Differences Between Foreign Trade and Foreign Direct Investment Essay

- Foreign trade Foreign trade is exchange of capital, goods, and services across international borders or territories. In most countries, it represents a significant share of gross domestic product (GDP). ( It is a trade between two or more countries and we can separate into three parts. • Import- Affluent countries import resources and commodities when they find comparative advantages in sourcing from foreign locations. (Holt, Wigginton, 2002) • Export – involves selling domestically produced products in foreign market through brokers or overseas distribution centres....   [tags: foreign trade, direct investment, global economy]

Powerful Essays
879 words (2.5 pages)

Spillover effects of FDI: Do Domestic Manufacturing Firms Benefit from Foreign Direct Investment in Vietnam?

- Spillover effects of FDI: Do Domestic Manufacturing Firms Benefit from Foreign Direct Investment in Vietnam. Introduction Back in the 1990s, foreign direct investment (FDI) became the largest source of external finance for many developing countries. In Vietnam in particular, the Law on Foreign Investment promulgated in the 1986 Congress to attract FDI was considered the first step of the doi moi (renovation) reform. The cumulative FDI increased from 28 projects of total US$ 140 million FDI in 1988 to 8266 project for roughly US$ 78 billions at the end of 2006....   [tags: FDI Foreign Direct Investment]

Free Essays
1833 words (5.2 pages)

The Current Foreign Direct Investment Essay

- 1) The article discusses about the current foreign direct investment (FDI) activities in China and how the devaluation of yuan has impacted the inflow and outflow of FDI in China. The article reports that in “China FDI fell by 5.8% in December from a year earlier to 77 billion yuan ($12 billion)”. FDI can be defined has when a firm invests directly in new facilities to produce and/or market in a foreign country. Additionally, FDI leads the firm to become a multinational enterprise (MNE). As discussed in the lectures, FDI can be done various ways, such as Greenfield investments, Cross-Border Mergers and Acquisitions (M&A) investments, and finally Brownfield Investment....   [tags: Risk, Investment, Foreign exchange market]

Powerful Essays
2069 words (5.9 pages)

Chinese Direct Investment During The U.s. Essay

- ... And dealing with Singapore, China Guangdong Nuclear Power Holding Corp. announced plans to build a biomass-solar power plant in Singapore by 2013, which is key to Singapore’s position as the gateway to the clean energy market in Asia Singapore’s property market has also been an attractive place for mainland Chinese investors who have been restricted from buying property at home because of government controls. China has been a big investor in Canada’s oil sands. Chinese energy firms have great interest in this....   [tags: Investment, Foreign direct investment]

Powerful Essays
934 words (2.7 pages)

Foreign Direct Investment Essay

- Introduction In macroeconomics, foreign direct investment has been defined as the direct investment made in a country by foreign individuals or corporate organizations. On a broader view, FDI refers to activities such as acquisitions and mergers, building of new facilities like factories and joint ventures. Zilibotti (2009) posits that there are three major forms of Foreign Direct Investment: Horizontal FDI where corporate investors duplicate the same activities in their home country in the country of investment, Platform FDI where the corporate invests in a country as a platform for exporting to another third country and vertical FDI where corporate investors downstream or upstream in a val...   [tags: corporate, organization, country, investment]

Powerful Essays
1167 words (3.3 pages)