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Require 1 advantage and disadvange of FDI 2 FDICompared by exporting licensing and wholly-owned subsidiary 3The factors of international manufacturing business consider in deciding among three Introduction It has become an important development tool for both developed and developing countries to attract foreign direct investment FDI Most investors of foreign investment have been attracted from the developed countries of the world in industrial sectors such as large technology-intensive enterprises as well as in the service sectors such as banking insurance and lately call-centers This leads to the question of why enterprises do choose to enter foreign countries and as such go abroad as investors The answer to this is simply that such enterprises need to expand new markets remain competitive and increase production - to maintain growth and profitability Furthermore one wonders why FDI occurs in some counties and in some industries and not in others The destination of foreign direct investments is an outcome of multiple factors and therefore hardly a predictable subject Individual investors that are active in specific industries and in particular countries might have a different response to the host market as well as the local investor The essay will discuss the advantage and disadvantage of FDI for companies seeking to expand oversea and the factors that firm decide among exporting licensing and FDI 1Definition Foreign direct investment FDI occurs when an entityinvestor from one country home country obtains or acquires the controlling interest in an entity in another country host country and then operates and manages that entity and its assets as part of the multinational business of the investing entity FDI are then financed through the transfer of funds from the parent company to the new affiliate as well as by borrowing from lenders in the home country or in the host country or any combination of these funding vehicles Appleyard Field 2001 Foreign Direct Investment is something that has been growing in the last two to
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