Foreign Direct Investment

1. Eclectic paradigm

1.1. location-specific advantages

1.2. begin to exploit resources

2. Vernon's product life-cycle theory

2.1. initiation of FDI

2.2. particular stages

2.2.1. I. Introduction

2.2.2. II. Growth

2.2.3. III. Maturity or Stabilization

2.2.4. IV. Decline

3. Knickerbocker's theory

3.1. imitative behavior

4. Pattern

5. Exporting

5.1. transportation cost

5.2. trade barriers

6. Entry modes disadvantages

7. Licensing

7.1. drawbacks

7.2. market imperfections

8. investment made in one country into business interests located in another country

9. Government Policy Instrument

10. Home countries

10.1. polices to encourage and restrict FDI

11. Host countries

11.1. attract FDI

11.1.1. by offering incentives

11.2. try to restrict FDI

11.2.1. by dictating ownership

12. Host countries

12.1. Resource transfer effects

12.2. Employment effects

12.3. Balance of payments effects

12.4. Competition

12.5. Adverse enffects on payment

12.6. Loss of national sovereignty

13. Benefits and Costs

14. Home countries

14.1. Improvement in the balance of payments

14.2. Positive employment effects

14.3. Benefits from a reverse effect

14.4. Adverse balance of payments

14.5. Costs

15. Greenfield investment

15.1. new operation

16. Main forms

17. incorporate with an existing company in a foreing country

18. Flow

18.1. outflows

18.2. inflows

19. World Economy

20. Stock

21. Political idiology

22. Radical view

22.1. Marxist theory

22.2. MNE as instrument of imperialist

23. Free Market View

23.1. classical economics

23.2. international trade theories

23.3. distribution among countries

23.4. theory of comparative advantage

24. Pragmatic Nationalism

24.1. benefit a host country

24.2. foreign rather than domestic

24.2.1. profits go abroad