foreign direct investment

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Foreign direct investment (FDI)

The acquisition abroad of physical assets such as plant and equipment, with operating control residing in the parent corporation.

Foreign Direct Investment

A major investment by a foreign corporation. A common example of foreign direct investment is a situation in which a foreign company comes into a country to build or buy a factory. Many economists believe that foreign direct investment is good for an economy, as it provides jobs and increases domestic capital. Critics point out that profits from foreign direct investment usually leave the country and go to the foreign company. Encouraging foreign direct investment is a major part of some IMF restructuring programs.

foreign direct investment (FDI)

investment by a MULTINATIONAL ENTERPRISE in establishing production, distribution or marketing facilities abroad. Sometimes foreign direct investment takes the form of GREENFIELD INVESTMENT with new factories, warehouses or offices being constructed overseas and new staff recruited. Alternatively, foreign direct investment can take the form of TAKEOVERS and MERGERS with other companies located abroad. Foreign direct investment differs from overseas portfolio investment by financial institutions which generally involves the purchase of small shareholdings in a large number of foreign companies.

FDI is used alongside STRATEGIC ALLIANCES and EXPORTING as an integral part of a multinational enterprise's FOREIGN MARKET SERVICING STRATEGY.

In 2003/2004, the USA was the world's leading outward (overseas) investor accounting for 15.5% of world outward FDI flows, followed by Belgium 13.3%, France 12.8%, the UK 12.7% and the Netherlands 5.8%. The USA was the leading recipient of inward FDI accounting for 17.3% of inward investment in 2003/2004, followed by Belgium 14.4%, Germany 9.7%, China 7.8% and the UK 7.1%.

foreign direct investment (FDI)

investment by a MULTINATIONAL COMPANY in establishing production, distribution or marketing facilities abroad. Sometimes foreign direct investment takes the form of GREENFIELD INVESTMENT, with new factories, warehouses or offices being constructed overseas and new staff recruited. Alternatively, foreign direct investment can take the form of TAKEOVERS and MERGERS with other companies located abroad.

Foreign direct investment differs from overseas portfolio investment by financial institutions, which generally involves the purchase of small shareholdings in a large number of foreign companies. See FOREIGN INVESTMENT for further discussion. See HOST COUNTRY, SOURCE COUNTRY, INVEST UK.

References in periodicals archive ?
9, 2012 /PRNewswire/-- With the rapid development of China's outbound foreign investment and the approval of China National Development and Reform Commission (NDRC), the 4th China Overseas Investment Fair (COIFAIR 2012), co-hosted by China Industrial Overseas Development & Planning Association and China Development Bank, the country's largest overseas investment and financing bank, will be held at China World Trade Center, Beijing on November 12-13, 2012.
Dorine Johnson, +44-20-7073-8538, or Johan Bastin, +44-7879-263-874, or David Masters, +44-20-7294-3687, all for Darby Overseas Investments
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Taipei, March 30, 2012 (CENS) -- Insurance firms with RBC (risk-based capital) ratio exceeding 200% can purchase foreign currency-denominated insurance policies, which will be excluded from the quota for their overseas investments, announced the Financial Supervisory Commission (FSC) yesterday (March 29).

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