Question

what are at 5 common themes about FDI? (Foreign Direct Investment)

Answer 1

Foreign Direct Investment (FDI) is a form of cross-border investment in which an investor living in one economy has a permanent interest in and a significant degree of control over a business residing in another. Ownership by an individual in another country of 10 per cent or more of the voting power in a company is proof of such a partnership.

FDI is a key component of international economic integration, as it establishes secure and long-lasting trade linkages. FDI is an important medium for technology transfer between countries, it facilitates international trade through access to foreign markets and can be an important tool for economic development.

Outward flows represent transactions that increase investments made by investors in the reporting economy in undertakings in a foreign economy, such as acquisitions of equity or reinvestment of earnings, minus any transactions that decrease investments made by investors in the reporting economy in undertakings in a foreign economy, such as equity sales or resident borrowing Inward flows are transactions that increase investment by foreign investors in companies resident in the reporting economy with fewer transactions that decrease investment by foreign investors in resident businesses

Horizontal FDI is investments in undertakings like those managed by the investment firm. Starbucks for example open a new store in a foreign country.
Vertical FDI applies to any investments in businesses that suit somewhere within the value chain of the investing business. BMW, for example, is investing in a Polish parts supplier.
Conglomerate FDI refers to investments in companies which are unrelated to the core business of the investing company. A real estate company, for example, that is opening a restaurant chain in another country.

External donors such as developed countries and multilateral financial institutions still have a crucial role to play in helping developing countries. The explosion of international investment flows in the private sector has not eliminated the need to support programs for growth and development in developing countries, even beyond emergency aid and programs for pure poverty reduction.