IB 150 Lecture Notes - Lecture 12: Westphalian Sovereignty, Market Failure, Franchising
31 May 2017
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Document Summary
Foreign direct investment occurs whenever a firm establishes a controlling interest in a business entity based in another country by acquiring ownership of more than 50% of the entity"s entire stock. Practically, the u. s. department of commerce deems an investment fdi whenever a. U. s. citizen, organization, or affiliated group takes an interest of 10% or more in a foreign entity. The flow of fdi refers to the amount of fdi undertaken over a given time period. The stock of fdi refers to the total accumulated value of foreign owned assets at a given time. The outflows of fdi refer to the flow of fdi out of a country. The inflows of fdi refers to the flow of fdi into a country. Historically, most fdi has been directed at the developed nations of the world as firms based in advanced countries invested in other markets. The us has been the favorite target for fdi inflows.
