Foreign Direct Investment
by Choong Chang Hong
1. Government Policy Instrument
2. investment made in one country into business interests located in another country
3. Greenfield investment
3.1. new operation
4. Main forms
5. incorporate with an existing company in a foreing country
6. World Economy
7. Flow
7.1. outflows
7.2. inflows
8. Stock
9. Entry modes disadvantages
10. Exporting
10.1. transportation cost
10.2. trade barriers
11. Licensing
11.1. drawbacks
11.2. market imperfections
12. Pattern
13. Knickerbocker's theory
13.1. imitative behavior
14. Vernon's product life-cycle theory
14.1. initiation of FDI
14.2. particular stages
14.2.1. I. Introduction
14.2.2. II. Growth
14.2.3. III. Maturity or Stabilization
14.2.4. IV. Decline
15. Eclectic paradigm
15.1. location-specific advantages
15.2. begin to exploit resources
16. Political idiology
17. Radical view
17.1. Marxist theory
17.2. MNE as instrument of imperialist
18. Free Market View
18.1. classical economics
18.2. international trade theories
18.3. distribution among countries
18.4. theory of comparative advantage
19. Pragmatic Nationalism
19.1. benefit a host country
19.2. foreign rather than domestic
19.2.1. profits go abroad
20. Benefits and Costs
21. Host countries
21.1. Resource transfer effects
21.2. Employment effects
21.3. Balance of payments effects
21.4. Competition
21.5. Adverse enffects on payment
21.6. Loss of national sovereignty
22. Home countries
22.1. Improvement in the balance of payments
22.2. Positive employment effects
22.3. Benefits from a reverse effect
22.4. Adverse balance of payments
22.5. Costs
23. Home countries
23.1. polices to encourage and restrict FDI
24. Host countries
24.1. attract FDI
24.1.1. by offering incentives
24.2. try to restrict FDI
24.2.1. by dictating ownership