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.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

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%.

Collins Dictionary of Business, 3rd ed. © 2002, 2005 C Pass, B Lowes, A Pendleton, L Chadwick, D O’Reilly and M Afferson

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.

Collins Dictionary of Economics, 4th ed. © C. Pass, B. Lowes, L. Davies 2005
References in periodicals archive ?
The outflow of foreign direct investments to the CIS states grew by 1.9%, mainly to Kazakhstan (+2.3%) and Russia (+0.2%).
In the first quarter of 2019, for instance, the net inflow of foreign direct investments reached $1.9 billion, down 15.1 percent from the $2.3 billion in the same period last year.
Financial and insurance activities amounted to 23 billion dollars, with total foreign direct investment contributing to around 19.3 percent in the UAE.
Foreign investments are made up of portfolio investments with 124.14 MD (+ 6.8% compared to 2017) and foreign direct investment with 2,742 billion dinars (+ 28.6%).
The foreign direct investment to the Sultanate increased from $ 5,947.075 million in 2006 to $ 18,750.055 million in 2016.
The survey covered foreign direct investment for economic activity, the portfolio and other investments.
In late 2014, the Department of Commerce Bureau of Economic Analysis (BEA) re-instated the Mandatory Reporting Requirements for New Foreign Direct Investment in the United States (BE-13).
For the period, the volume of foreign direct investments from Russia amounted to $14.9 million against $52.6 million in 2013.
The Central Bank of Egypt is currently auditing indicators for the period since June 2014, with figures to be announced soon and including rates for foreign direct investment and growth.
The Central Bank of Egypt (CBE) pointed out that in the third quarter of 2010/11, foreign direct investment declined at a rate of 90.4 percent compared to the same quarter of 2009-2010, while net inflows reached about 1.8 billion US dollars.
Foreign direct investment in the United States dropped sharply in 2012 after rebounded slowly in 2010 and 2011 after falling from the $310 billion recorded in 2008.
In its report on foreign direct investments in Central, Eastern and South-Eastern Europe, the Vienna Institute projects that least foreign investments will generate into Macedonia and Bosnia&Herzegovina compared to other countries in the SEE region.

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