Foreign Direct Investment

FDI is considered to be an important indicator and a driving force of:

• Political globalization

• Ecological globalization

• Economic globalization

Is FDI a new phenomenon?

• Yes

• No

In the classic definition, foreign direct investment is defined as:

• a company from one country making a physical investment into building a factory in another country

• a company from poor country making a financial investment in another country

• a company from one country making a financial investment in another country

What are the 3 most known types of FDI?

• horizontal, vertical, platform

• horizontal, vertical, conglomerate

• platform, vertical, conglomerate

What does greenfield foreign direct investment refer to?

• It refers to the FDI when an investing company establishes a new company as its subsidiary.

• It refers to the FDI when an investing company invests into existing company of a host country.

What does brownfield foreign direct investment refer to?

• It refers to the FDI where a foreign company establishes a new company as its subsidiary.

• It refers to the FDI where a foreign company invests in the existing business in a country.

Is only an investor benefiting from FDI?

• yes

• no

Choose host’s country benefits:

• Lower cost of labor, cheaper production facilities, new market.

• Fresh capital in the country, development of human capital, tax incentives.

• Generates employment, bring new skills and technologies, promotes export and increases tax revenues.

Which of these answers are disadvantages of foreign direct investment?

• Risk of the unknow, lower cost of labor

• Displacement of local businesses, uncertainty in government policies

• New technologies, development of human capital

What is NOT an FDI?

• Amazon set up its branches in India.

• Polish company opened its new department in Wrocław.

• A cell phone provider based in the United States opened stores in China.