Foreign Direct Investment

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Foreign Direct Investment by Mind Map: Foreign Direct Investment

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