INTB-300 Study Guide - Final Guide: Eurocurrency, Intensify, Economic Community Of West African States
3 Apr 2016
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Fdi: purchase of physical assets or a significant amount of the ownership (stock) of a company. Portfolio investment: investment that does not involve obtaining a degree of control in a company. Theory: theory stating that a company will begin by exporting its product and later undertake foreign direct investment as product moves through its life cycle. Market imperfections (internalization: theory stating that, when an imperfection in the market makes a transaction less efficient than it could be, a company will undertake foreign direct investment to internalize the transaction and thereby remove imperfection. Eclectic theory: theory stating that firms undertake foreign direct investment when features of a particular location combine ownership and internalization advantages to make a location appealing for investment. Market power: theory stating that a firm tries to establish a dominant market presence in an industry by undertaking fdi.
