Foreign Direct Investment - FDI

Foreign direct investment, or FDI, is investment made to enterprises operating outside of the economy of the investor. The FDI relationship consists of a parent enterprise and a foreign affiliate which together form an MNC - multinational corporation. In order to qualify as FDI the investment must afford the parent enterprise control over its foreign affiliate.

Depending on the direction, target, and motive of the investment, there are different types of FDIs, such as: inward FDI, outward FDI, greenfield investment, mergers and acquisitions, horizontal FDI, vertical FDI, resource seeking, market seeking, efficiency seeking, strategic-asset-seeking, etc.