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When a country starts to control the ownership of a big business enterprise by an entity which is based in another country is called foreign direct investment. You can learn this easily by taking foreign direct investment homework help. We, at myhomeworkhelp.com are constantly working day and night to provide you with the best ever support for your all types of homework.

The two types of investment are:

  • By inorganically: It does not put an effect on the definition of FDI. The investment can be made by purchasing a company in its targeted company and this type is known as inorganically.
  • By organically: On the other hand, organically occurs by expanding different types of operations of a persisting business in that particular country.

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Want to know about the main determinants of foreign direct investment?

In that case, we can discuss below about the three main determinants.

They are as follows:

  • Removal of conflicts: when a company operates successfully in foreign market or tends to enlarge its different kinds of operations within that same market, then the conflict arises. The market imperfection may increase due to the conflict between land acquisition and with the control of operation of these lands.
  • Firm- based specific advantages: A firm is able to exploit some of its advantages which are linked to the imperfections in the market. It can provide the market with a lot of competitive advantages and market power. The firms also goes to the extent of monetize the different kinds of advantages to get varied forms of licenses.
  • Propensity to formulate strategies that are internationalization strategy to control risk: In this case, the firms are structured with three different levels decision making. They are:
  1. Management decision coordination
  2. Day to day supervision
  3. Long term strategy of decision making and planning

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