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Any theory seeking to explain foreign direct investment (FDI) must explain why firms go to the trouble of acquiring or establishing operations abroad when the alternatives of exporting and licensing are available to them
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UNE 203C2 INTERNATIONAL TRADE AND MULTINATIONAL BUSINESS ASSIGNMENT 2 BY 00503807 'Any theory seeking to explain foreign direct investment (FDI) must explain why firms go to the trouble of acquiring or establishing operations abroad when the alternatives of exporting and licensing are available to them.' Using appropriate example, discuss the relative merits of those theories that have attempted to explain the growth in FDI in recent decades. "Foreign Direct Investment refers to the movement of capital that involves ownership and control." (Appleyard & Field, 2001. p.205) It is about one firm in one country acquiring assets and setting up production in another country. Foreign Direct Investment is something that has been growing in the last two to three decades, for example United States investment in capital abroad in the manufacturing industry was worth $1,819 million at the beginning of 1982 but by the beginning of 2002, that figure had risen to $5,892 million (source -...
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