1.

Investment classification
- Official Flows of Investment
- Private Investment
- Domestic Investment
- Foreign Investment
- Direct investment
- Indirect investment
- Fixed capital formation – Productive Investment (contribute directly to the productive
capacity of the economy)
- Financial Investment (do not contribute directly to the productive capacity of the
economy)
2. International Investment concept
- Definition of investment + capital moves outside a country’s border
- Foreign investment vs International investment
o Foreign investment: capital movement across a certain nation’s border
o International investment:
3. International investment theories
- Theories assuming perfect markets:
o The differential rates of return hypothesis
o The portfolio diversification hypothesis
o The market size hypothesis
- Theories assuming imperfect markets
o The product life cycle hypothesis
o