Foreign Direct Investment (FDI) Quiz

When a country makes an investment into a company

When a company makes an investment into a foreign country and has right to control

When a domestic country invests into its own companies

When foreign individuals invest in domestic stock markets

The resource transfer effect

National sovereignty and autonomy

The balance of payments effect

The employment effect

Service facilities

Capital contribution

Office facilities

Production facilities

Huawei invested in the rapidly growing mobile phone market in Africa.

Zara located its manufacturing facilities near major fashion markets like Europe

Nike manufactured shoes in low-wage Asian countries.

Caterpillar entered a joint venture with Mitsubishi to improve production efficiency.

Human resources

Intellectual properties

Tangible goods

Intangible goods

Money circulation

Demand

Employment

Unemployment

underdeveloped, underdeveloped countries

developed; underdeveloped countries.

 developed; each other's markets.

underdeveloped; each other's markets

1. Apple

LG

1. Samsung

1. Coca Cola

Difficulty in accessing needed raw materials

 High shipping costs for goods from abroad.

 Political and economic risk in the host country.

Loss of control over production operations.