Foreign direct investment - Foreign direct investment (FDI)...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Foreign direct investment (FDI) is defined as "investment made to acquire lasting interest in enterprises operating outside of the economy of the investor. The UN defines control in this case as owning 10% or more of the ordinary shares or voting power of an incorporated firm or its equivalent for an unincorporated firm; lower ownership shares are known as portfolio investment. Types of FDI Inward This short section requires expansion. Inward foreign direct investment is when foreign capital is invested in local resources. Inward FDI is encouraged by: > Tax breaks, subsidies, low interest loans, grants, lifting of certain restrictions > The thought is that the long term gain is worth short term loss of income Inward FDI is restricted by: > Ownership restraints or limits > Differential performance requirements Outward This short section requires expansion. Outward foreign direct investment, sometimes called "direct investment abroad", is when local capital is invested in foreign resources. Outward FDI is encouraged by: > Government-backed insurance to cover risk Outward FDI is restricted by: > Tax incentives or disincentives on firms that invest outside of the home country or on
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 03/31/2010 for the course ECONOMICS 322 taught by Professor H during the Spring '08 term at Kadir Has Üniversitesi.

Page1 / 2

Foreign direct investment - Foreign direct investment (FDI)...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online