Foreign direct investment (FDI)
Foreign direct investment (FDI) is investment by multinational enterprises in productive assets in foreign countries, involving direct ownership and control. It differs from portfolio investment (buying shares passively) and includes establishing factories, acquiring businesses, and expanding operations abroad.
Real World
Apple's decision to manufacture iPhones through Foxconn factories in China brought billions in FDI inflows, creating over a million manufacturing jobs but also attracting criticism over wages and working conditions.
Exam Focus
Distinguish clearly between FDI benefits to the host country and to the MNC — conflating them is a common mistake that loses marks.
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