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FDI Full Form - Foreign Direct Investment ( full form of fdi )

 Full Form of FDI

Full Form of FDI

  • FDI stands for Foreign Direct Investment. ( full form of fdi )
  • It's the investment made by a corporation based in one country into a corporation based in another country.
  • It differs from portfolio flow wherein a foreign company invests within the equities listed on the stock market of a country.
  • It is called direct investment because the investor is seeking control or influence over a corporation or entity of a country.
  • The foreign direct investment is typically made into countries which have open economies, high growth prospects and skilled workforce at relatively cheap rates.

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Benefits of FDI

  • FDI features a number of benefits. Number of the main benefits are given below:
    • It generates employment within the country
    • It brings fresh capital within the country
    • It improves forex position of the country
    • It brings new skills and technologies into a country
    • It promotes exports and increases tax revenues
    • It gives the investor company access to foreign market of a country
    • The investor company can reduce the value of production if labor is reasonable within the target foreign market.
    • The investor company can utilize the natural resources of a country like metals, fossil fuel etc.

Types of FDI ( full form of fdi )

  • There are two types of FDI
    • Greenfield FDI
    • Brownfield FDI
Types of FDI

Types of FDI

Greenfield FDI

  • It refers to the FDI where rather than investing into existing company of a country the foreign company establishes a new company as its subsidiary.
  • For eg, Google , Facebook and Amazon have found out their branches in India.

Brownfield FDI

  • It refers to the FDI where a foreign company invests within the existing business in a country.
  • It doesn't establish a replacement office or production facility.
  • It purchases the prevailing production facility in a country to grow the prevailing business.
  • For eg, Vodafone bought Hutch.

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