Question

What would be an example for using the FDI(Foreign direct investment) approach?

Which types of products and services would be appropriate for Foreign direct investment method?

Answer 1

FDI implies investment by foreign investors directly in the productive assets of another nation. .A foreign direct investment (FDI) is an investment made by a firm or individual in one country into business interests located in another country. Generally, FDI takes place when an investor establishes foreign business operations or acquires foreign business assets in a foreign company. Horizontal, vertical, and conglomerate are types of FDI’s.

A horizontal direct investment refers to the investor establishing the same type of business operation in a foreign country as it operates in its home country, for example, a cell phone provider based in the United States opening stores in China.

vertical investment is one in which different but related business activities from the investor's main business are established or acquired in a foreign country

conglomerate type of foreign direct investment is one where a company or individual makes a foreign investment in a business that is unrelated to its existing business in its home country.

Examples of foreign direct investments include mergers, acquisitions, retail, services, logistics, and manufacturing, among others.

Types of products and services appropriate for FDI :

1. Retail

2. Real estate

3. Infrastructure

4. Telecom

5. Fast food chain