Foreign direct investment
Definition
Foreign direct investment (FDI) occurs when an individual or company from one country invests directly in businesses located in another country.
Analogy
Imagine you're opening up a lemonade stand, but instead of using your own money, your neighbor decides to invest some money into your business. That's foreign direct investment - when someone from another country puts their money into businesses abroad.
Related terms
Multinational corporations: These are companies that operate in multiple countries and have business activities in various locations around the world.
Host country: The host country is the nation where foreign direct investment takes place, receiving investments from individuals or companies based in other countries.
Capital inflow: Capital inflow refers to the movement of money into a country for investment purposes, including foreign direct investment.
"Foreign direct investment" appears in:
Subjects (2)
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