Market
Investments which aim at either
penetrating new markets or keeping existing ones.
12-4.3.3. Efficiency-Seeking: Investments which
firms hope will increase their efficiency by maximizing the benefits.
12-4.3.4. Strategic-Asset-Seeking: It is a
tactical investment to stop the loss of resource to a competitor. Easily
compared to that of the oil producers, whom may not need the oil at present,
but look to stop their competitors from having it.
Questions:
Give the definition of Investment?
Give definition of Foreign direct investment
(FDI)?
List types of FDI by direction?
List types of FDI by Target ?
List types of FDI by Motive ?
Translate the following paragraph:-
FDI
Economists prefer the free flow of capital
across national borders because it allows capital to seek out the highest rate
of return. Unrestricted capital flows may also offer several other advantages.
First, international flows of capital reduce the risk faced by owners of
capital by allowing them to expand their lending and investment. Second, the
global integration of capital markets can share to the spread of best practices
in corporate governance, accounting rules, and legal traditions. Third, the
global movement of capital limits the ability of governments to follow bad
policies.
The gains to host countries from FDI can take
several other forms:
FDI allows the transfer of technology that
cannot be achieved through financial investments or trade in goods and
services.
FDI can also support competition in the domestic
input market.
FDI often helps employee to training in the
course of operating the new businesses
Profits generated by FDI share to
corporate tax revenues in the host country.