Question:- Give a detailed account of the factors that induce firms to engage in foreign direct investment, distinguishing as appropriate between asset-oriented and market-oriented FDI. Provide examples to illustrate your answer
Definition of Foreign Direct Investment (FDI).
“Foreign direct investment are the net inflows of investment to acquire a lasting management interest (10 percent or more of voting stock) in an enterprise operating in an economy other than that of the investor. It is the sum of equity capital, reinvestment of earnings, other long-term capital, and short-term capital as shown in the balance of payments. ” (World Bank)
FDI net inflows are the value of inward direct investment made by non-resident investors in the reporting economy. This is usually reported for a given year