FOREIGN DIRECT INVESTMENT (FDI)

• A foreign direct investment (FDI) is where an

individual or business from one nation, invests
in another.
• merger, acquisition, wholly owned, share
acquisition.
 TYPES OF FDI

Horizontal FDI
Vertical FDI Conglomerate FDI
 FOREIGN DIRECT INVESTMENT

ADVANTAGES DISADVANTAGES
• Reduced Regional and Global • Foreign Control
Tensions • Loss of Domestic Jobs
• Sharing of Technology, • Risk of Political or Economic
Knowledge, and Culture Change
• Diversification
• Lower Costs and Increased
Efficiency
• Employment and Economic
Boost
Known Examples of FDI
 FREE TRADE
Free trade occurs when there are no
artificial barriers put in place by
governments.
 TYPES OF FREE TRADE
AGREEMENT
• Unilateral Trade Agreement
• Bilateral Trade Agreements
• Multilateral Trade Agreements
 ADVANTAGES DISADVANTAGES
• Foreign Direct • Poor working
Investment condition
• Increase Economic • Degradation of
Growth natural resources
• Expertise • Threat to small
• Technology transfer trades
• Reducing the demand
local product
 EXAMPLES
• ASEAN Trade in Goods Agreement  
• Philippines – Japan Economic Partnership
Agreement 
• Philippines – European Free Trade Association Free
Trade Agreement (Iceland, Liechtenstein, Norway,
and Switzerland)
• North American Free Trade Agreement (NAFTA),
which covers the U.S., Canada, and Mexico