IGS 10a Lecture Notes - Lecture 5: Foreign Direct Investment, Multinational Corporation, Foreign Portfolio Investment
13 Sep 2016
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Document Summary
Mncs and accountability: the rise of mncs. Foreign direct investment (fdi) = acquisition, ownership, and control of physical assets - a place of business - in a foreign (host) country. More fdi still flows to developed economies - but developing and transition (post-communist) economies have significantly increased fdi shares since the. Foreign portfolio investment (fpi) = stocks, bonds, and other financial assets held abroad no managerial control over a foreign business. Multinational corporation (mnc) = a company with fdi in at least 2 host countries. The largest mncs are in retail, energy, autos, and financial services from us, The world"s largest companies mainly come from the us, japan, and china. The largest and wealthiest economies with the most highly skilled labor are most attractive to mncs. Resources: some firms need access to raw materials. Markets: proximity to customers, and/or suppliers, is often critical. Technology: global communication allow long-distance coordination and management.
