December 2015
Intermediate to advanced
313 pages
16h 2m
English
Content preview from International Business, 2nd Edition by Pearson
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Foreign Direct Investment 181
■ FDI is classified according to three factors—asset creation or asset acquisition, nature of
business activity, and motives driving the investment.
■ Horizontal FDI takes place when a firm invests abroad in the same industry in which it operates
in the home country.
■ Horizontal FDI is a safe way to enter a foreign market because it produces the same product as
the parent company, and so experience and infrastructure are easily shared.
■ Vertical FDI refers to investment in activities along the firm’s existing supply chain to avail the
benefits of vertical integration.
■ Vertical FDI acts as an intermediary or ...
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