Garrett Barnes Chapter 18 1. Define and discuss the differences between passive investment and active investment as they relate to international minority ownership investments. A passive investment is one in which the investor limits its involvement to providing equity or debt capital to an enterprise managed by another party. With an active investment, the investor participates in the management of the enterprise. Because passive investments create the least risk of foreign control, they are the least regulatory type of foreign investments. Active minority ownership investments, on the other hand, begin to raise the specter of outsider influence and this are the subject of greater governmental regulation. 2. Discuss the different ways a company may engage in majority ownership interests abroad and the various issues involved. There are a number of important business reasons why an enterprise would prefer to establish an entity it can control though majority ownership rather than an entity in which it owns a minority interest. But, taking minority
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This note was uploaded on 09/01/2011 for the course BUSINESS 101 taught by Professor Jones during the Spring '11 term at Southern Nazarene.