11-06-2014, 10:45 AM
FOREIGN DIRECT INVESTMENTS.pptx (Size: 88.91 KB / Downloads: 22) FOREIGN DIRECT INVESTMENTS
Foreign Direct Investment (FDI) is a…..
Direct investment into production or business in a country by a company of another country.
In the form of either buying a company in a target country or by expanding operations of an existing business in that country.
Example : -
A Chinese Company building a factory and a supply chain in the US in order to tap into the American market would be an example of Chinese foreign direct investment into AmericaHORIZONATAL FDI :-
TYPES OF FOREIGN DIRECT INVESTMENT
Horizontal FDIs arises when a firm duplicates its home country based activities at the same value chain stage in a host country through FDI. In short, it is the investment in the same industry abroad as a firm operates in at home.
VERTICAL FDI :-
Vertical FDI takes place when a firm through FDI moves upstream or downstream in different value chain i.e. when a firm perform value – adding activities stage by stage in a vertical fashion in a host country.