FDI stands for Foreign Direct Investment, a component of a country's national financial accounts.It plays an extraordinary and growing role in global business. It can provide a firm with new markets and marketing channels, cheaper production facilities, access to new technology, products, skills and financing. For a host country or the foreign firm which receives the investment, it can provide a source of new technologies, capital, processes, products, organizational technologies and management skills, and as such can provide a strong impetus to economic development
"An investment abroad, usually where the company being invested in is controlled by the foreign corporation"
FOR EXAMPLE: FDI is an INDIAN company taking a majority stake in a company in USA.
FDI MUST DO:
Assessment of internal resources,
Competetiveness
Market analysis
Market expectation
Advantages of Foreign Direct Investment:
- Most successful domestic companies, especially those with unique advantages, invest abroad
- Direct investment makes companies more successful domestically
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