What is the foreign direct investment?
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| Definition of foreign investment |
Foreign direct investment can be defined in a simple way as the investment of a company in projects located outside the borders of the mother country.
This is what we find today in the international arena represented by "multinational companies" which could develop into economic colonialism.
Types of foreign direct investment
We find that there are two types of foreign investments:
- Public investments from the governments of foreign countries.
- Private investments are from private companies and institutions from different countries.
When do countries resort to attracting foreign direct investment?
Usually, countries resort to foreign direct investment when domestic savings are insufficient to cover the needs of the state, to finance investment projects, and accelerate development in the country.
Foreign investment here is considered important support for the developing country to face the deficit in national savings available for investment.
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