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Essay / Research Paper Abstract
This 9 page paper considers what is meant by the term direct foreign investment (DFI), and indirect foreign investment, why it occurs as well as the advantages and disadvantages that it creates. The bibliography cites 4 sources.
Page Count:
9 pages (~225 words per page)
File: TS14_TEdirinv.rtf
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Unformatted sample text from the term paper:
with this model. A country may have natural resources, but not the wealth to access and make use of those resources. Therefore, in order to increase its economic wealth there
is the need for investment. This will usually be from a country that has more wealth and possibly more knowledge. At the same time, a company may see that there
are resources that are unused, which they believe they could use to create a profit. The perception is that if they invest in making use of those resources they will
also increase there own profit. This is one scenario for international investment. However, there are many more. Generally, we will see international investment take place where one country has a
need that it cannot meet internationally, either financial, or knowledge based, and another company has the resources they need. The combination of the two parties then creates a businesses.
Investment may take place in one of two ways. Direct investment and indirect investment, These are often confused, therefore, we will start out by explaining these terms, before looking at
why they happen and how they may impact on the parties and countries involved. Direct Foreign Investment is often known colloquially as DFI. This is where there is an investment
made directly in a country by a foreign government, company or other organisation. By direct investment it means that money is used to create facilities in that country these
may be manufacturing facilities or assembly facilities, or some types of physical presence, usually developing a green field site. Indirect investment is where an investment is made in a
less direct manner, with money being used to purchase shares or the provision of funds for bonds, the investment is made in a tool that then brings money into he
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