Chapter 8- Foreign Direct Investment Flashcards
FDI
foreign direct investment
two forms of FDI
greenfield investment and acquiring or merging with an existing firm in the foreign country
difference between FDI and foreign portfolio investment
FDI is a more direct investment and foreign portfolio investment is just buying stock in a company
the amount of FDI undertaken in a given period of time
flow of FDI
the accumulated value of foreign owned assets at a given period of time
stock of FDI
how much FDI leaves your country over a period of time
outflows of FDI
how much FDI comes into your country
inflows of FDI
when deciding about where to invest you always need to understand
the treaties that a country may be involved in
alternatives to FDI
exporting and licensing because FDI is usually much more expensive
the net increase in physical assets within a measurement period
gross fixed capital formation
the money a country gives to or receives from other countries
a country’s balance of payment account
tracks the exports and imports of goods and services
current account
governments are concerned when their country is running a _____ on their current account of their balance of payments
deficit
a government created program to counteract another government created program (tariffs)
foreign trade zones
goods enter the US and go directly to this area in order to avoid tariffs and duties; pay the tariffs only as the goods exit the zone
general purpose zone
