GROUP 5

FOREIGN DIRECT
INVESTMENT
Economic Geography
Lê Như Thảo
Nguyễn Anh Thư Đoàn Thị Thu Thủy
Vũ Thủy Tiên Nguyễn Trường Giang
Phan Thị Nguyệt Vũ Thị Thái Hạnh

MEMBERS OF GROUP 5
I. WHAT IS FOREIGN DIRECT INVESTMENT?
1. Definition
■ FDI is an investment in the form
of a controlling ownership in
a business in one country by an
entity based in another country.
■ FDI activity created the parent
company and its subsidiaries,
formed a transnational
corporation
■ It is distinguished from a foreign
portfolio investment by a notion
of direct control.
 2. Forms of FDI
INVESTMENT PURPOSES
■ Greenfield investment - build new
factory or expand existing factory/
production lines.
■ Merger & Acquisition - An investment
company buy all the assets of a
foreign company.
■ Horizontal FDI - Invest in the same
industry
■ Vertical FDI - Invest in a company
specializing in providing inputs, or
specializing in selling products.
OBJECTIVES
■ Resource-seeking - Invest in order to
reach production lines and other
resources such as cheap labor or
natural resources, which are not
available for investment
■ Market-seeking - Investing in new
markets or maintaining existing
markets
■ Efficiency-seeking - Investing to
increase efficiency by taking
advantage of economies of scale or
scope, or both.
■ Strategic-Asset-seeking - Investing to
prevent the loss of resources in the
hands of competitors.
II. WHY THERE IS FDI?
 MARKET-SEEKING
Go overseas to find new buyers
for their goods and services
MARKET RESOURCE-SEEKING
Believe investments overseas will
bring higher returns than It cheaper to produce its
additional investments at home product in a foreign subsidiary-
for the purpose of selling it
either at home or in foreign
EFFICIENCY RESOURCE
markets

STRATEGIC
ASSET
EFFICIENCY-SEEKING STRATEGIC ASSET SEEKING
Multinational companies may Invest in other companies
also seek to reorganize their abroad to help build strategic
overseas holdings in response to assets
broader economic changes

FOR INVESTORS
 FOR INVESTMENT RECIPIENTS

TECHNOLOGY TRANSFER

ECONOMIC GROWTH

JOB CREATION AND EMPLOYMENT

III. ADVANTAGES & DISADVANTAGES TO
VIETNAM’S ECONOMY?
 ECONOMIC
DEVELOPMENT
STIMULATION

CONSUMER EASY
INTERNATIONAL
BENEFIT TRADE
ADVANTAGES
OF FDI TO
VIETNAM’S
EOCONOMY

RESOURCE EMPLOYMENT
TRANSFER GENERATION
 THE IMBALANCE IN
INVESTMENT
STRUCTURE

LACK OF
MANAGERIAL
DECREASE IN
EXPERIENCE &
TRADITIONAL JOBS
TRANSFER OF

DISADVANTAGES
TECHNOLOGY

OF FDI TO
VIETNAM’S
EVADE FINANCIAL THE GAP BETWEEN
ECONOMY
DUTY AND UNFAIR THE RICH & THE
COMPETITION POOR

ENVIRONMENTAL
POLLUTION AND
WASTE NATURAL
RESOURCES
IV. SOLUTIONS FOR DISADVANTAGES
S It is necessary to change our view on how to attract FDI
O
L The government needs to set up a new policy which helps
U eliminating inequality between our enterprises and
foreign-invested enterprises
T
I The data collection system should be established in order
to deal with FDI capital flows
O
N
Improve the role of state management
S
 REFERENCES
https://connectusfund.org/17-big-advantages-and-disadvantages-of-foreign-direct-investment
https://en.wikipedia.org/wiki/Foreign_direct_investment
http://www.saga.vn/thuat-ngu/foreign-direct-investment-fdi-dau-tu-truc-tiep-nuoc-ngoai~3212
https://www.thebalance.com/what-is-foreign-direct-investment-1979197
http://www.globalization101.org/why-do-companies-invest-overseas/
 THANK YOU
FOR YOUR ATTENTION