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Foreign Direct Investment

Foreign Direct Investment. Key Vocabulary. Acquisition. A transaction in which one company buys another company. Controlling Interest. When an individual person or a company owns enough stock to choose the company’s board, management, and policies. Deregulation.

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Foreign Direct Investment

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  1. Foreign Direct Investment Key Vocabulary

  2. Acquisition A transaction in which one company buys another company.

  3. Controlling Interest When an individual person or a company owns enough stock to choose the company’s board, management, and policies.

  4. Deregulation Action by a government to abolish or relax a law or rule concerning some aspect of business. Sometimes (but not usually) may also refer to removing or reducing barriers to trade.

  5. Foreign Direct Investment (FDI) When a company from one country (the home country) makes an investment of capital into either its own operations in another country (the host country) or into another company in the host country.

  6. Greenfield Investment When a company from one country invests in a completely new business in a host country.

  7. Home Country The country in which a company that makes an investment into a foreign company is based.

  8. Host Country The country in which a company that receives an investment from a foreign company is based.

  9. Joint Venture (JV) When two companies join together for mutual gain in a collaborative business venture they own jointly.

  10. Merge The act of combining one company with another company to form a single, larger new company.

  11. Merger A transaction that combines one company with another to form a single, larger new company.

  12. Parent Company A company that has a controlling interest in a subsidiary.

  13. Physical Investment When an investor directly funds the purchase, building, or improvement of a physical asset rather than just puts money into a company.

  14. Spillover Effect A nonfinancial benefit of FDI, such as a transfer of knowledge, technology, or management technique.

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