International Investment and Collaboration
14.1 Understand international investment and collaboration.
Foreign direct investment (FDI) is an internationalization strategy by which the firm establishes a physical presence abroad through direct ownership of productive assets such as capital, technology, labor, land, plant, and equipment. FDI is the most advanced and complex foreign market entry strategy. Firms use FDI to establish manufacturing plants, marketing subsidiaries, or other facilities in target countries. Because this involves investing substantial resources to establish a physical presence abroad, FDI is riskier than other entry strategies.
Do not confuse FDI with international portfolio investment, which refers to passive ownership ...
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