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| FDI=foreign direct investment.
quoted directly from "Understanding Foreign Direct Investment (FDI)" by Jeffrey P. Graham and R. Barry Spaulding as contributors to bizzed international gateway for CITIBANK Foreign direct investment (FDI) plays an extraordinary and growing role in global business. It can provide a firm with new markets and marketing channels, cheaper production facilities, and 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. Foreign direct investment, in its classic definition, is defined as a company from one country making a physical investment into building a factory in another country. The direct investment in buildings, machinery and equipment is in contrast with making a portfolio investment, which is considered an indirect investment. In recent years, given rapid growth and change in global investment patterns, the definition has been broadened to include the acquisition of a lasting management interest in a company or enterprise outside the investing firm's home country. As such, it may take many forms, such as a direct acquisition of a foreign firm, merger with a foreign company, construction of a facility, or investment in a joint venture or strategic alliance with a local firm with attendant input of technology, licensing of intellectual property. For companies already involved with high tech products or who see themselves as being integrally involved in high technology in the very near future, foreign direct investment is a critical success factor. Those executives who disagree with this notion can be usually found appearing daily in bankruptcy court proceedings or dawdling in unemployment lines. Key Benefits
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