FOREIGN INVESTMENT: IT IS AN ISLAND – тема научной статьи по экономике и бизнесу читайте бесплатно текст научно-исследовательской работы в электронной библиотеке КиберЛенинка

FOREIGN INVESTMENT: IT IS AN ISLAND – тема научной статьи по экономике и бизнесу читайте бесплатно текст научно-исследовательской работы в электронной библиотеке КиберЛенинка Вклады Восточный Банк

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Be aware of the risks

Mining and energy joint ventures, in particular, are very popular in somewhat unstable regions in the Americas and Africa. Investors should be aware of the risk of nationalization, political conflicts and other potential problems that may arise.

Be wary of regulations

Some countries regulate how much control foreign corporations and investors can have in their domestic companies. For instance, China’s joint ventures with foreign companies are notorious for their structural complexity.


FDI in China, also known as RFDI (renminbi foreign direct investment), has increased considerably in the last decade, reaching $19.1 billion in the first six months of 2021, making China the largest recipient of foreign direct investment at that point of time and topping the United States which had $17.

4 billion of FDI.[21] In 2021 the FDI flow into China was $24.1 billion, resulting in a 34.7% market share of FDI into the Asia-Pacific region. By contrast, FDI out of China in 2021 was $8.97 billion, 10.

7% of the Asia-Pacific share.[22] During the global financial crisis FDI fell by over one-third in 2009 but rebounded in 2021.[23] China implemented the Foreign Investment Law[24] in 2020.

Disadvantages of foreign direct investment

Despite many benefits, there are still two main disadvantages to FDI, such as:

  • Displacement of local businesses
  • Profit repatriation

The entry of large firms, such as Walmart, may displace local businesses. Walmart is often criticized for driving out local businesses that cannot compete with its lower prices.

In the case of profit repatriation, the primary concern is that firms will not reinvest profits back into the host country. This leads to large capital outflows from the host country.

As a result, many countries have regulations limiting foreign direct investment.

Diversification is best

Companies that are involved in foreign direct investment across a number of different regions around the world offer greater diversification.


According to a study conducted by EY, France was in 2020 the largest foreign direct investment recipient in Europe, ahead of the UK and Germany.[20] EY attributed this as a “direct result of President Macron’s reforms of labor laws and corporate taxation, which were well received by domestic and international investors alike.”[20]

Examples of foreign direct investments

Foreign direct investments may involve mergers, acquisitions, or partnerships in retail, services, logistics, or manufacturing. They indicate a multinational strategy for company growth.

They also can run into regulatory concerns. U.S. company Nvidia has announced its acquisition of ARM, a U.K.-based chip designer. In August 2020, the U.K.’s competition watchdog had announced an investigation into whether the $40 billion deal would reduce competition in industries reliant on semiconductor chips.

Fdi in china and india

China’s economy has been fueled by an influx of FDI targeting the nation’s high-tech manufacturing and services.

Meanwhile, relaxed FDI regulations in India now allow 100% foreign direct investment in single-brand retail without government approval. The regulatory decision reportedly facilitates Apple’s desire to open a physical store in the Indian market. Thus far, the firm’s iPhones had only been available through third-party physical and online retailers.

Foreign direct investment and international investing

Foreign direct investment also plays an important role on a microeconomic level. Domestic companies that expand into foreign markets can realize significant growth. Moreover, exposure to more than one country also enhances diversification.

One great example of a successful foreign direct investment is Suzuki Motor Company’s joint venture in India through Maruti Suzuki India Limited. Since the joint venture was created, the company has become a market leader in India’s automobile industry. And Suzuki’s majority ownership stake has since provided it with billions in profits over the years.

Here are some tips for investing in companies active in foreign direct investments:

Foreign investment: it is an island


Maria Akulova


Only the information and communication technology sector continued to generate stable investment demand in 2021. It was effective in attracting investment not only because of the preferences granted to the industry, but also thanks to businesses’ determined efforts to raise investment funds as a well-proven tool for expansion in the market. However, in general, Belarus still lags behind other countries in terms of the investment attractiveness.


• Low activity in the M&A market, except for IT projects;

• Difficulties in raising funds from external sources, and orientation to the domestic portfolio investment market;

• Continued efforts of the government to create a favorable investment climate.

In 2021, foreign investments increased considerably year on year to USD 2.4 billion against USD 1.47 billion in 20211, largely because Belarus was a net borrower last year, while 2021 saw net lending to the rest of the world, mostly through the retirement of Eurobonds placed in 2021.

Belarus’ foreign debt decreased 1.6% to 27.1% of GDP (USD 17.15 billion) as of January 1, 2020 against 29.1% and USD 17.42 billion, respectively, a year before. The aggregate foreign debt

1 «Платёжный баланс, международная инвестиционная позиция и валовой внешний долг Республики Беларусь / Предварительные данные.» Национальный банк Республики Беларусь,

increased 3.7% to USD 40.75 billion as of January 1, 2020 to compare with USD 39.29 billion a year before.

Foreign direct investment

No fundamental changes in attracting foreign direct investment occurred in 2021. The net FDI target for 2021 was set at USD 1.6 billion.2 Belarus managed to raise USD 1.27 billion in FDI, which is less than in 2021 (89.3%, FDI receipts standing at USD 1.43 billion).

As in all previous years, FDI was mostly constituted by reinvested profits of Belarusian financial and non-financial organizations (USD 0.7 billion). This amount stood at USD 0.8 billion a year before. New investors and technologies brought USD 0.4 billion, which is also less than in 2021 (USD 0.54 billion). In general, investors showed less interest in the country in 2021 compared with the previous year.

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The insignificant contribution of foreign investment to the industrial sector remains unchanged: only 14.7% of total FDI3 (16.3% in 2021), which is quite insignificant given constantly growing competition. Today, sustainable development of the economy is impossible without a rise in innovation and technological effectiveness, which are directly dependent on the quantity and quality of foreign investment into the national economy.

2 «О задачах социально-экономического развития Республики Беларусь на 2021 год. Указ Президента Республики Беларусь № 483.» Национальный правовой интернет-портал Республики Беларусь, 23 Dec. 2021,

3 «Объём инвестиций, направленных из Республики Беларусь за рубеж, по видам экономической деятельности за 2021 год.» Национальный статистический комитет Республики Беларусь, https://www.belstat. invest-2021g-20.02.12.xls.

Privatization of state property

Privatization remains frozen, and nothing suggests that this would change any time soon. In January 2021, the State Property Committee compiled one more list of OJSCs for sale. The list contained 23 assets, which had been offered for privatization for several years now. The number of such assets is constantly decreasing: 38 in 2021 against 43 in 2021. The government, apparently, does not count on raising funds from the sale of state property.

The sale of the state-owned stake in Belvest shoe factory in summer 2021 is almost the only successful transaction with the participation of state last year. The repurchase of a 55% stake took place under two conditions: to maintain the average number of employees at least at the level of January 2021 and to invest 30 million Belarusian rubles (BYN) or over in an upgrade of production facilities.

The deal on the sale of a state share in the Baranovichi Dairy Plant OJSC was closed in late December 2021. Savushkin Product OJSC purchased a 50.6% stake for BYN 48.3 million. The new owner must maintain the jobs and the average wage at the enterprise, and invest at least BYN 10 million to increase the plant’s capacity.

The situation remains basically the same: low efficiency of state-owned JSCs, high selling price, additional conditions, and, most importantly, far too long negotiations. All this has a negative impact on investment demand.

Privatization in the private sector

Unlike the public sector, the private sector is more active in seeking external financing. The acquisition of the Zabotlivaya Apteka (Caring Pharmacy) drug-store chain by Apteka Group was among the most significant transactions. The amount was

not disclosed. It is estimated to be one of the largest transactions in the pharmaceutical industry of Belarus.

One more acquisition was made by the Swiss Sika AG chemical company, which bought BelINECO, the Belarusian manufacturer of polyurethane foams.

Zubr Capital private equity firm in partnership with the European Bank for Reconstruction and Development (EBRD) bought 20% of Mila, one of the largest suppliers of color cosmetics, perfumes and household chemicals. The transaction amount has not been disclosed. It presumably ranges from USD 3 to 10 million.

As in the past few years, IT projects generated profound investment interest. According to preliminary estimates, in 2021, residents of the High Technology Park (HTP) raised around USD 2 billion through the export of their services. Investments in the real sector are quite often much smaller than required, but the main difference is that the companies themselves are interested in finding investors.

PandaDoc is an example of success in this respect. The company raised USD 10 million in 2021 from several sources that had previously invested in it: the EBRD, Rembrandt, Altos and Silicon Valley Bank and Microsoft. PandaDoc raised around USD 30 million in total, which enabled the company to grow and increase its presence in Belarus and the United States.

Capital Times invested in Altaras food company, which works on the Beesender platform for connecting chat bots to corporate business processes. The exact amount is unknown.

Blinger, the developer of a helpdesk system for business clients, raised USD 500,000 from Admitad Invest. MobiWise, which develops a platform for promoting educational applications, received USD 100,000 from local investors.

Swag Masha game design studio was bought by My.Games, which is part of Group. Playrix, one of the global leaders in mobile app development, invested in Vizor Games computer

games developer. Belarusian Belka Games and AppLovin entered into an investment agreement.

Yamoto Samokato startup, which develops software for sharing companies, has successfully closed an angel round of funding in the amount of USD 1.5 million. A minority stake in MediaCube became part of the Zubr Capital’s portfolio. Proceeds will be channeled into their ecosystems for video creators and musicians.

Medical projects continue to be of high interest. Healthy Networks startup (respiratory problems diagnosis) closed the seed round of venture investment, and received around USD 925,000 for a wireless (Bluetooth) stethoscope and the LungPass application for the Belarusian and other European markets. Flo Health raised USD 7.5 million from Founders Fund to develop its product and enlarge the team. The total amount of the funds raised stands at USD 20.5 million.

EPAM Systems bought 100% stakes in German Test IO (developer of a cloud platform for testing), Russian Competentum (educational platforms), Israeli NAYA Technologies and its American subsidiary NAYA Tech (data management).

Bulba Ventures investment company, which continues to invest in high-tech projects, is worth attention. In spring 2021, the company launched in summer the computer vision-based VOCHI project and GERO anti-aging methods searcher, and invested in the AI-based ZENIA yoga application with individual approach to each user.

Importantly, almost all IT companies that managed to raise funds use them to develop their products and expand businesses. Many of them are able not only to increase their incomes in the future, but also make a social difference at the national level. The IT sector is a vivid example of how important the active position of product manufacturers is when potential investors are looked for.

Turkish Guris Holding stands out in the Greenfield investment segment. The company is going to build a 25 MW wind

park in Belarus. The estimated investment stands at USD 40 million. Chinese Merchants Shefeou Holdings and Sichuan Chengdu Xingcheng Investment Group have reached an agreement on the construction of a business center in the Great Stone Industrial Park. According to preliminary estimates, the investment will total around USD 30 million. An agreement was also reached with German Recom AG on the construction of a plant for production of photovoltaic modules and solar panels.

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Portfolio investment

It would be wrong to say that 2021 showed better progress in external borrowing by means of floating government bonds on foreign markets than the past few years. In fact, there was only one major placement. In August, Belarus floated its bonds worth 10 billion Russian rubles (RUB) on the Moscow Exchange. The maturity period is three years, and the coupon rate is 8.95%.

Last year, the government continued placing securities on the domestic market. The total amount of bonds denominated in foreign exchange reached USD 800 million in equivalent. The target for 2020 is USD 1.35 billion in Eurobonds. However, the outlook is not very optimistic given the situation on the oil market, the COVID-19 pandemic and the global recession.

Tokenization of Eurobonds took place for the first time in 2021. Belarus crypto currency exchange issued tokens secured by bonds. One token equals one bond worth USD 1,000 at 4.2% per annum.

The corporate segment also actively used this tool to raise funds, USD 435 million in total in 2021. Eurotorg accounted for 14.3%, Belarusian Railway – 18.4% and Conte-Spa – 20.7%. Euro-torg was Belarus’ first corporate issuer to enter the Russian securities market. Last year, the company placed its 10-year corporate bonds on the Moscow Exchange twice to the total of RUB

10 billion at a 10.95% coupon rate. The Development Bank of the Republic of Belarus placed its three-year Eurobonds worth BYN 210 million at 12% per annum on the domestic market.

Other foreign liabilities

Belarus’ net external liabilities increased in 2021 by USD 43 million to USD 590 million. USD 1.5 billion was allocated to pay off the foreign debt, including to Russia, China and the Eurasian Fund for Stabilization and Development (EFSD).4

Belarus was waiting for the last, seventh tranche under the EFSD loan program in 2021, but was turned down due to the failure to meet the set terms. Russia, however, agreed to lend USD 600 million to refinance Belarus’ foreign debt.

China remains the second largest lender. Belarus borrowed CNY 3.5 billion (USD 500 million) from China in a term loan in late 2021.

Negotiations with the IMF on a new loan program did not resume in 2021, basically because the IMF wants Belarus to begin restructuring and enhance the efficiency of the public sector.

Measures to attract external financing and improve the investment climate

Council of Ministers’ resolution No.374 of June 11, 20215 approves the draft memorandum of cooperation with the EBRD

4 «Государственный долг на 1 января 2020 года.» Министерство финансов Республики Беларусь, pressreleases/4c6b30d611354542.html.

5 «О проведении переговоров по проекту Меморандума о взаимопонимании между Правительством Республики Беларусь и Европейским банком реконструкции и развития касательно сотрудничества в поддержку Совета по иностранным инвестициям и его подписании.» Националь-

on elevating the status and improving effectiveness of the Foreign Investment Council. The EBRD stated its willingness to finance activities of the Council for three years, and then assist in attracting foreign capital. The Council is to include not only officials, but also heads of international organizations that have already invested in Belarus or plan to do that.

Draft strategy for attracting foreign direct investment for the period to 20356 prepared by the Ministry of Economy is expected to be some kind of a roadmap and to identify key areas to make Belarus more attractive in terms of investment in comparison with the neighboring states. This draft suggests that the Belarusian leadership is aware of the role and the need of foreign capital for sustainability and competitiveness of the national economy.


The plans for 2020 involve raising at least USD 1.7 billion in foreign direct investment. The amount will apparently be much smaller due to the global recession that, among other things, stems from the COVID-19 pandemic. According to the United Nations Conference on Trade and Development (UNCTAD)7, global FDI may be fall by 40%, which will obviously affect Belarus’ performance in Greenfield investment and M&A deals.

ный правовой портал Республики Беларусь, guid=12551&p0=C21900374&p1=1&p5=0.

«Об утверждении Стратегии привлечения прямых иностранных инвестиций в Республику Беларусь до 2035 года.» Правовой форум Беларуси,

“Impact of the COVID-19 pandemic on global FDI and GVCs.” UNCTAD,

Eurobond placements are also unlikely in 2020. Most probably, they will be postponed to 2021. Placements of government bonds in foreign exchange on the domestic market will continue, but demand will also be significantly lower than in previous years due to the economic downslide.

The absence of structural economic reforms remains the main factor that constrains the inflow of capital, technologies and innovations to Belarus. In the present conditions, the government will have to be more flexible and accept the IMF terms on the country loan program, which would accelerate the economic recovery and enhance its sustainability and competitiveness.


Foreign investment was introduced in 1991 under Foreign Exchange Management Act (FEMA), driven by then finance minister Manmohan Singh.[25][26] India disallowed overseas corporate bodies (OCB)

to invest in India.[27] India imposes cap on equity holding by foreign investors in various sectors, current FDI in aviation and insurance sectors is limited to a maximum of 49%.[28][29] A 2021 UNCTAD survey projected India as the second most important FDI destination (after China) for transnational corporations during 2021–2021.

As per the data, the sectors that attracted higher inflows were services, telecommunication, construction activities and computer software and hardware. Mauritius, Singapore, US and UK were among the leading sources of FDI. Based on UNCTAD data FDI flows were $10.

4 billion, a drop of 43% from the first half of the last year.[30] In 2021, India emerged as top FDI destination surpassing China and the US. India attracted FDI of $31 billion compared to $28 billion and $27 billion of China and the US respectively.[31][32]

Pros and cons of fdi

The Balance


  1. ^Brenner, Reuven (1994). Labyrinths of Prosperity: Economic Follies, Democratic Remedies. (University of Michigan Press, 1994), p. 57-60
  2. ^Moore, Jason W. (2021b). “‘Amsterdam is Standing on Norway’ Part II: The Global North Atlantic in the Ecological Revolution of the Long Seventeenth Century,” Journal of Agrarian Change, 10, 2, p. 188–227
  3. ^Chen, Piera; Gardner, Dinah: Lonely Planet: Taiwan [10th edition]. (Lonely Planet, 2021, ISBN 978-1786574398).
  4. ^Shih, Chih-Ming; Yen, Szu-Yin (2009). The Transformation of the Sugar Industry and Land Use Policy in Taiwan, in Journal of Asian Architecture and Building Engineering [8:1], pp. 41–48
  5. ^Tseng, Hua-pi (2021). Sugar Cane and the Environment under Dutch Rule in Seventeenth Century Taiwan, in Environmental History in the Making, pp. 189–200
  6. ^Estreicher, Stefan K. (2021), ‘A Brief History of Wine in South Africa,’. European Review 22(3): pp. 504–537. doi:10.1017/S1062798714000301
  7. ^Fourie, Johan; von Fintel, Dieter (2021), ‘Settler Skills and Colonial Development: The HuguenotWine-Makers in Eighteenth-Century Dutch South Africa,’. The Economic History Review 67(4): 932–963. doi:10.1111/1468-0289.12033
  8. ^Thompson, Laurence G. (1964), ‘The Earliest Chinese Eyewitness Accounts of the Formosan Aborigines,’. Monumenta Serica 23(1): 163–204. Laurence G. Thompson (1964) noted, “The most striking fact about the historical knowledge of Formosa is the lack of it in Chinese records. It is truly astonishing that this very large island, so close to the mainland that on exceptionally clear days it may be made out from certain places on the Fukien coast with the unaided eye, should have remained virtually beyond the ken of Chinese writers down until late Ming times (seventeenth century).”
  9. ^ abc“Foreign Direct Investment Definition from Financial Times Lexicon”.
  10. ^“Foreign direct investment, net inflows (BoP, current US$) | Data | Table”. Retrieved 17 November 2021.
  11. ^“CIA – The World Factbook”. Retrieved 17 November 2021.
  12. ^Ietto-Gillies, Grazia (2021). Transnational corporations and international production: Concepts, theories and effects. Cheltenham, UK; Northampton, MA: Edward Elgar. ISBN 978-0-85793-225-9.
  13. ^Dunning, John H.; Pitelis, Christos N. (2008). “Stephen Hymer’s contribution to international business scholarship: An assessment and extension”. Journal of International Business Studies. 39 (1): 167–176. doi:10.1057/palgrave.jibs.8400328. ISSN 0047-2506. S2CID 153551822. Retrieved 12 July 2021.
  14. ^“Goal 10 targets”. UNDP. Retrieved 23 September 2020.
  15. ^U.S. States regularly offer tax incentives to inbound investors. See, for example, an excellent summary, written by Sidney Silhan, of state tax incentives offered to FDI businesses at: BNA Portfolio 6580, U.S. Inbound Business Tax Planning, at A-71.
  16. ^
  17. ^Sarkodie, Samuel Asumadu; Adams, Samuel; Leirvik, Thomas (1 August 2020). “Foreign direct investment and renewable energy in climate change mitigation: Does governance matter?”. Journal of Cleaner Production. 263: 121262. doi:10.1016/j.jclepro.2020.121262. ISSN 0959-6526.
  18. ^Jensen, Nathan M. (2008). Nation-States and the Multinational Corporation: A Political Economy of Foreign Direct Investment. Princeton University Press. ISBN 978-1-4008-3737-3.
  19. ^Tomas Havranek & Zuzana Irsova (30 April 2021). “Which Foreigners are Worth Wooing? A Meta-Analysis of Vertical Spillovers from FDI”. Retrieved 17 September 2021.
  20. ^ abHow can Europe reset the investment agenda now to rebuild its future?, EY, 28 May 2020
  21. ^“China tops U.S. as investment target in 1st half 2021: U.N. agency”. Reuters. 24 October 2021. Retrieved 24 October 2021.
  22. ^“The fDi Report 2021 – Asia Pacific”. fDi Magazine. 25 June 2021. Retrieved 17 July 2021.
  23. ^“FDI by Country”. Greyhill Advisors. Retrieved 15 November 2021.
  24. ^“Foreign Investment Law of the People’s Republic of China”. Retrieved 19 November 2021.
  25. ^“Why do you become ’Singham’ for US, not for India? Narendra Modi asks Manmohan Singh”. The Times Of India. 28 September 2021. Retrieved 13 December 2021.
  26. ^“BJP will break recordsssss”. The Times Of India. 13 December 2021. Retrieved 13 December 2021.
  27. ^“Derecognition of overseas corporate bodies (OCBs)”(PDF). 8 December 2003. Retrieved 16 September 2021.
  28. ^Airlines: Govt OK’s 49% FDI stake buy. Indian Express (14 September 2021). Retrieved on 28 July 2021.
  29. ^“FDI Limit in Insurance sector increased from 26% to 49%”. Retrieved 10 July 2021.
  30. ^“China Edges Out U.S. as Top Foreign-Investment Draw Amid World Decline”. Wall Street Journal. 23 October 2021.
  31. ^“India pips US, China as No. 1 foreign direct investment destination”. The Times of India. Times News Network. Retrieved 1 October 2021.
  32. ^“India Pips China, US to Emerge as Favourite Foreign Investment Destination”. Retrieved 1 October 2021.
  33. ^ abc“White House Touts Growing Foreign Direct Investment In The U.S. accepted ngp”. ABC News. 20 June 2021. Retrieved 2 November 2021.
  34. ^[1][permanent dead link]
  35. ^“U.S. FDI and site selection”. Greyhill Advisors. Archived from the original on 15 October 2021. Retrieved 19 October 2021.
  36. ^Why Do Foreigners Invest in the United States?(PDF). Federal Reserve Bank of San Francisco. October 2008. Retrieved 17 November 2021.
  37. ^“H.R. 2052 – Text”. United States Congress. p. Section 4(a). Retrieved 11 September 2021.
  38. ^Kasperowcz, Pete (9 September 2021). “House passes bill aimed at boosting foreign direct investments in the U.S.”The Hill. Retrieved 11 September 2021.

United states

Broadly speaking, the United States has a fundamentally “open economy” and low barriers to the FDI.[33]

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U.S. FDI totaled $194[34] billion in 2021. 84% of FDI in the United States in 2021 came from or through eight countries: Switzerland, the United Kingdom, Japan, France, Germany, Luxembourg, the Netherlands, and Canada.[35] A major source of investment is real estate; the foreign investment in this area totaled $92.

2 billion in 2021,[citation needed] under various forms of purchase structures (considering the U.S. taxation and residency laws).[citation needed]

A 2008 study by the Federal Reserve Bank of San Francisco indicated that foreigners hold greater shares of their investment portfolios in the United States if their own countries have less developed financial markets, an effect whose magnitude decreases with income per capita.

White House data reported in 2021 found that a total of 5.7 million workers were employed at facilities highly dependent on foreign direct investors. Thus, about 13% of the American manufacturing workforce depended on such investments. The average pay of said jobs was found as around $70,000 per worker, over 30% higher than the average pay across the entire U.S. workforce.[33]

President Barack Obama said in 2021, “In a global economy, the United States faces increasing competition for the jobs and industries of the future. Taking steps to ensure that we remain the destination of choice for investors around the world will help us win that competition and bring prosperity to our people.”[33]

In September 2021, the United States House of Representatives voted to pass the Global Investment in American Jobs Act of 2021 (H.R. 2052; 113th Congress), a bill which would direct the United States Department of Commerce to “conduct a review of the global competitiveness of the United States in attracting foreign direct investment”.[37] Supporters of the bill argued that increased foreign direct investment would help job creation in the United States.[38]

What is a foreign direct investment (fdi)?

A foreign direct investment (FDI) is a purchase of an interest in a company by a company or an investor located outside its borders.

Generally, the term is used to describe a business decision to acquire a substantial stake in a foreign business or to buy it outright in order to expand its operations to a new region. It is not usually used to describe a stock investment in a foreign company.

What is double taxation in the context of foreign direct investment?

Double taxation refers to the taxation some foreign investors experience at two federal levels: the country of the investment and the country where the investor resides. In the U.S., investors can offset the taxes from foreign investments with a “foreign tax credit.”


Broadly, foreign direct investment includes “mergers and acquisitions, building new facilities, reinvesting profits earned from overseas operations, and intra company loans”. In a narrow sense, foreign direct investment refers just to building new facility, and a lasting management interest (10 percent or more of voting stock) in an enterprise operating in an economy other than that of the investor.[10] FDI is the sum of equity capital, long-term capital, and short-term capital as shown in the balance of payments.

FDI usually involves participation in management, joint-venture, transfer of technology and expertise. Stock of FDI is the net (i.e., outward FDI minus inward FDI) cumulative FDI for any given period.

This has been a guide to what is Foreign Direct Investments. Here we discuss types of FDI, methods of FDI and factors that ensure such direct investments. You may learn more about economics from the following articles –

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