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Unit 4

Unit 4

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Published by abhishek_shukla_60

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Published by: abhishek_shukla_60 on Apr 08, 2012
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04/08/2012

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Unit -4Foreign investmentExchange rate mechanismGlobal capital marketEure currency
 
Foreign direct investment
Foreign directinvestment
(
FDI
) or foreign investment refers to thenet inflows of investmentto acquire a lasting management interest(10 percent or more of voting stock) in an enterprise operating in aneconomy other than that of the investor.
It is the sum of equity capital, reinvestment of earnings, other long-term capital, and short-term capital as shown in thebalance of  payments. It usually involves participation inmanagement, joint- venture,transfer of technologyandexpertise.
There are two types of FDI: inward foreign direct investment andoutward foreign direct investment, resulting ina
net 
FDI
inflow 
(positive or negative) and "stock of foreign directinvestment", which is the cumulative number for a given period.Directinvestment excludesinvestment through purchase of  shares. FDI is one example of international factor movement.
 
Types
an individual;
a group of related individuals;
an incorporated orunincorporated entity;
a group of related enterprises;
a government body;
anestate (law),trustor other social institution; or
any combination of the above.

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