FOREIGN

DIRECT
INVESTMENT
Presenter : Mohammad Naser kintoz walizada
 CONTENTS
• What is FDI
• Type of FDI
• By Target
• By Motive
• By Direction
• By Entry mode
• Advantages
• Disadvantages
 WHAT IS FDI
• Foreign direct investment is an investment in a business by an investor from anther country
for which foreign investor has control over the company purchase.

• Also it refer to investment into production by a company located in another country

 TYPE OF
FDI
• By target
• By motive
• By direction
• By entry mode
 BY TARGET

• Horizontal FDI
• Where the company carries out the same activities abroad as at home ( Toyota assembling
car both japan and UK).

• VERTICAL FDI
• When different activities are added abroad ( Toyota car distribution in America.
BY MOTIVE
• Resource seeking- looking for resource for real lower price.

• Market seeking-secure market share and sales growth target foreign market.

• Strategic seeking- to acquire assets in foreign farms that promote corporate long term
objectives.
 BY
DIRECTION
• Inward FDI
• Involves an foreign entity either in or purchasing the goods of a local company.

• Outward FDI
• Is a business strategy where a domestic firm expand its operation to a foreign either via
acquisition or expansion of an existing facility.
 BY MODE
• Greenfield investment. Investment in a manufacturing
• Forest

• Mergers

• Combination of two company to form new campany.

• Improve exchange position of country.
• Help in capital formation
• Help to increase export
• Increase tax revenue
• Harm for domestic companies
• lose their ownership
• Not able to compete with world large companies
• Government has less control over the functioning of those companies.
THANKS