The Theory of Foreign Direct Investment
The concept of foreign direct investment (FDI) is a rather ambiguous one. To begin with, is the foreign investor the individual whose postponement of consumption enables the investment to be financed? Or is the investor the firm whose shares are owned by the individual concerned, and which owns the real assets on his behalf? If the investor is the firm then by what rules of nationality is it established that the firm is a foreign one — in particular, is there a meaningful economic criterion for the nationality of a multinational enterprise (MNE)?
KeywordsForeign Direct Investment Indifference Curve Individual Investor Multinational Enterprise Initial Endowment
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