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Investment Dictionary


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Foreign Direct Investment

 

Foreign direct investment (FDI) traditionally was understood as investment that is made by foreign country in direct assets, for example factory, including land, building and machinery. When financial markets evolved, foreign direct investments became those investments that are made for long term by subject of other country in a company with management influence interest. 

 

If some US investor will include to his portfolio some stocks from London Stock Exchange, it won’t be a foreign direct investment; it will be simple foreign investment

 

Foreign direct investment is very important for country’s economy and is a widely used indicator by the economists. It shows how much of capital is flowing in to the country, which is important for the perspectives. Large foreign investments mean that a lot of workplaces going to be created, and that leads to an economic growth.

 

 






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