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Globalisation, Transnationals and Economic Policy
Pages 6 (1506 words)
Foreign direct investment (FDI) is described the long-term investment by a foreign based direct investor in a business organization or enterprise residing in an economy that is not where the economy of the the foreign direct investor is located.
Basically, the relationship in a foreign direct investment supply scheme, consists of a investing parent enterprise and the foreign affiliate where money is invested in.
Foreign direct investment has been very very important to the economic development in Central and Eastern Europe over the last decade. Basically, importance is marked by successful resource seeking there. Also, Market seeking is another important economic development in Central and Eastern Europe. Lastly, Efficiency seeking has improved the economic situation in Central and Eastern Europe.
Basically, importance is marked by successful resource seeking there. Some parent companies invests large capital resource in order to to acquire major factors of production that are more efficient than if the factors are obtained in its home country base. In fact, these scarce resources may not even be available in the home economy at all. These major factors include cheap labor and natural and resources. This exemplifies why Foreign Direct Investors set up shop into developing countries like the Asian third world countries. Specifically, some parent companies would go out of its way to seek cheap and hard to find natural resources in the Middle East and Africa. ...
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