IB 150 Midterm: Review2
31 May 2017
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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. Marxist roots: mne considered a tool for imperialist domination. Nationalization of mne (multinational enterprises) subsidiaries, ex: venezuela makes american oil companies to sell their products to a venezuelan oil company or confiscate the product. Multinationals viewed as an instrument for dispersing production and flow of goods & services in the most efficient manner. Practiced mainly in advanced and some developing countries, e. g. , \u. s. , u. k. , Fdi viewed as having both benefits and costs. Lies in between the radical and the free-market views. Governments should pursue policies designed to maximize the national benefits and minimize the national costs of fdi:
