12

FOREIGN DIRECT INVESTMENT

LEARNING OBJECTIVES

After reading this chapter, you should be able to:

  • Identify the different forms of foreign direct investment (FDI) in the global economy
  • Examine the economic rationale underlying FDI behavior
  • Understand why firms often prefer direct investment as a strategy for entering a foreign market over alternatives such as exporting and licensing
  • Determine the costs and benefits of FDI for home and host countries
  • Understand FDI flows in the global and Indian context
CARREFOUR SHUTS SHOP IN INDIA

The French multinational retailer Carrefour SA has decided to shut down its Indian operations and close its wholesale stores in the country as part of a broad policy decision to pull out of underperforming markets ...

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