foreign direct investment
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Foreign direct investment (FDI)
Foreign Direct Investment
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.