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Explain the underlying basis for foreign direct investment, and discuss several factors that may contribute to it. What factors have likely contributed to the current U.S. net direct investment position?© BrainMass Inc. brainmass.com March 4, 2021, 10:05 pm ad1c9bdddf
Foreign direct investment (FDI) in its classic definition, is defined as a company from one country making a physical investment into building a factory in another country.
- In order to qualify as FDI the investment must afford the parent enterprise control over its foreign affiliate.
- The UN defines control in as owning 10% or more of the ordinary shares of the firm.
The parent enterprise and the foreign affiliate together form a Multi-National Corporation (MNC).
There are various factors that contribute to FDI. FDI can be divided into four different ...
U.S.'s net direct investment position is uncovered.