Foreign Direct Investment (FDI) Lecture Notes

This set of flashcards covers key concepts and details pertaining to Foreign Direct Investment (FDI) as outlined in the lecture notes.

What are the benefits of FDI to host countries?

Resource transfer employment and BOP effects, increased competition, and economic growth

What are the costs of FDI to host countries?

Local competition, potential negative impacts on the BOP, and loss of national sovereignty

What are the different forms of FDI?

Acquisitions or greenfield investments

What influences a government's attitude towards FDI?

Political ideology including radical views or free market approaches

How has FDI trended in the last 30 years?

FDI flow and stock have risen, outpacing world trade growth due to globalization and changes in politics

What are the limitations of exporting as a strategy for firms that makes it less profitable?

Transportation costs, trade barriers, and a low value-to-weight ratio

What is the role of government in relation to FDI?

Governments can encourage or restrict FDI through various policies