4.1.2 Foreign Direct Investment

Question 1

What is Foreign Direct Investment?
(FDI)

Answer 1

Investment from one country into another that involves establishing operations or acquiring tangible assets.

Question 2

What the two main flows of FDI?

Answer 2

Inward FDI
Outward FDI

Question 3

What is Inward FDI?

Answer 3

When a overseas business decides to build a manufacturing factory in the UK

Question 4

What is Outward FDI?

Answer 4

When a Uk business decides to make a manufacturing factory overseas.

Question 5

What occurs with Money and profit when doing Inward FDI?

Answer 5

Money flows into the UK initially, but profit flows out in LT

Question 6

Where does Money and Profit go when doing Outward FDI?

Answer 6

Money flows out of UK initially , but in LT profits flow in.

Question 7

Why would a business engage in FDI?

Answer 7

-Low labour costs
-Closer to raw materials
-Protectionist measures
-Return on investment
-Market development