Professional Documents
Culture Documents
Types
1. Horizon FDI arises when a firm duplicates its home country-based activities at the same value chain stage in a host country through FDI.[3] 2. Platform FDI 3. Vertical FDI takes place when a firm through FDI moves upstream or downstream in different value chains i.e., when firms perform value-adding activities stage by stage in a vertical fashion in a host country.[3] Horizontal FDI decreases international trade as the product of them is usually aimed at host country; the two other types generally act as a stimulus for it.
Methods
The foreign direct investor may acquire voting power of an enterprise in an economy through any of the following methods: by incorporating a wholly owned subsidiary or company anywhere by acquiring shares in an associated enterprise through a merger or an acquisition of an unrelated enterprise participating in an equity joint venture with another investor or enterprise
Foreign direct investment incentives may take the following forms: low corporate tax and individual income tax rates tax holidays other types of tax concessions preferential tariffs special economic zones EPZ Export Processing Zones Bonded Warehouses Maquiladoras
investment financial subsidies soft loan or loan guarantees free land or land subsidies
Foreign direct investment relocation & expatriation infrastructure subsidies R&D support derogation from regulations (usually for very large projects)
Country attractiveness
There are multiple factors determining host country attractiveness in the eyes of large foreign direct institutional investors, notably pension funds and sovereign wealth funds. Research conducted by the World Pensions Council (WPC) suggests that perceived legal/political stability over time and medium-term economic growth dynamics constitute the two main determinants[4] Some development economists believe that a sizeable part of Western Europe has now fallen behind the most dynamic amongst Asias emerging nations, notably because the latter adopted policies more propitious to long-term investments: Successful countries such as Singapore, Indonesia and South Korea still remember the harsh adjustment mechanisms imposed abruptly upon them by the IMF and World Bank during the 1997-1998 Asian Crisis [] What they have achieved in the past 10 years is all the more remarkable: they have quietly abandoned the Washington consensus [the dominant Neoclassical perspective] by investing massively in infrastructure projects []: this pragmatic approach proved to be very successful.[5]
References
[1] "Foreign direct investment, net inflows (BoP, current US$) | Data | Table" (http:/ / data. worldbank. org/ indicator/ BX. KLT. DINV. CD. WD). Data.worldbank.org. . Retrieved 2012-11-17. [2] "CIA - The World Factbook" (https:/ / www. cia. gov/ library/ publications/ the-world-factbook/ docs/ notesanddefs. html?countryName=Iran& countryCode=ir& regionCode=me#2198). Cia.gov. . Retrieved 2012-11-17. [3] "What is Foreign Direct Investment, Horizontal and Vertical Knowledge Base" (http:/ / guidewhois. com/ 2011/ 01/ what-is-foreign-direct-investment-horizontal-and-vertical/ ). Guidewhois.com. . Retrieved 2012-11-17. [4] M. Nicolas Firzli & Vincent Bazi (Q4 2011). "Infrastructure Investments in an Age of Austerity : The Pension and Sovereign Funds Perspective" (http:/ / worldpensions. org/ uploads/ Infra_Investments. . . Pension___SWF_Perspective__4Q_2011. pdf). Revue Analyse Financire, volume 41, pp. 34-37. . Retrieved 30 July 2011. [5] {{Cite news|author=M. Nicolas J. Firzli quoted by Andrew Mortimer|title= Country Risk: Asia Trading Places with the West|url= http:/ / www. euromoneycountryrisk. com/ Analysis/ Country-Risk-Asia-trading-places-with-the-west| work=Euromoney Country Risk |date= May 14 2012 |accessdate=5 Nov. 2012 | location [6] (http:/ / business. globaltimes. cn/ world/ 2011-01/ 613560. html) [7] "White House Touts Growing Foreign Direct Investment In The U.S." (http:/ / abcnews. go. com/ blogs/ politics/ 2011/ 06/ white-house-touts-growing-foreign-direct-investment-in-the-us/ ). ABC News. June 20, 2011. . Retrieved November 2, 2012.
External links
UNCTAD Division on Investment and Enterprise (http://unctad.org/en/pages/DIAE/DIAE.aspx) UNCTAD FDI Statistics (http://unctadstat.unctad.org/ReportFolders/reportFolders. aspx?sRF_ActivePath=p,5&sRF_Expanded=,p,5) Investment Map : database provided by the UN/WTO agency "International Trade Centre" (ITC) (http://www. investmentmap.org) FDI opportunity in Indian Cold Chain Sector (http://www.freshplaza.com/news_detail.asp?id=101699) World Development Indicators (http://databank.worldbank.org/Data/Popular_indicators/ID/af3ce82b/series/ code/BN.KLT.DINV.CD) Databank.worldbank.org (http://databank.worldbank.org/Data/Views/Reports/TableView. aspx?IsShared=true&IsPopular=series) Investment Policy Framework for Sustainable Development (http://ipfsd.unctad.org/Default.aspx?ReturnUrl=/ ) FDI in Multi Brand Retail Trade, The Journey, September 2012, Dinodia Capital Advisors (http://www. dinodiacapital.com/pdfs/FDI in Multi Brand Retail Trade - The Journey, September 2012.pdf)
License
Creative Commons Attribution-Share Alike 3.0 Unported //creativecommons.org/licenses/by-sa/3.0/