Dayton Business Daily

What is an example of Foreign Direct Investment?

Would that be as if a Chinese company wanted to expand into America?

Public Comments

1. Foreign direct investment (FDI) generally refers to how a company decides to expand its operations to a foreign country by making either acquiring an existing business in the foreign country or by building a new subsidiary from the ground up (known as a greenfield investment). In both of these cases, the company is spending money in creating/developing a subsidiary in the foreign country in order to expand. This is different from an expansion into foreign markets by making all the goods in the home country and then just selling the products in the foreign country. In this situation, the foreign country is not receiving any money from the expansion. As for an example, a Chinese company building a factory and a supply chain in the US in order to tap into the American market would be an example of Chinese foreign direct investment into America.