BA 3340 Lecture Notes - Lecture 10: Strategic Alliance, Externality, Comparative Advantage
Document Summary
Occurs when a firm invests directly in new facilities to produce and/or market in a foreign country (must own 10% or more, or it is only a portfolio investment) Greenfield investments: the establishment of a wholly new operation in a foreign country. Acquisitions or mergers with existing firms in the foreign country. Amount of fdi undertaken over a given time period: outflows of fdi. The flows of fdi out of a country: inflows of fdi. The flows of fdi into a country. Total accumulated value of foreign-owned assets at a given time. Growth of fdi is a result of: a fear of protectionism. Want to circumvent trade barriers: political and economic changes. Deregulation, privatization, fewer restrictions on fdi: new bilateral investment treaties. Designed to facilitate investment: globalization of the world economy. Many companies now view the world as their market. Need to be closer to their customers. Total amount of capital invested in factories, stores, office buildings, and the like.
