types of foreign capital
TRANSCRIPT
Types of Foreign Capital…
FDI (Foreign direct Investment) FPI(Foreign Portfolio
Investment) FII (Foreign Institutional
Investment) ECB(External Commercial
Borrowings) ADR/GDR( Depository Receipts)
FDI Vs FPI Long Term in nature than FPI. Control and controlling & Interest in
management in its Policies.
Why study FDI…?? Raises concerns and consequences of
Foreign Ownership. Offers the possibility of channeling
Resources to the developing countries.
Types of FDI
Horizontal FDIVertical FDIConglomerate FDI
(A) For Source Country
(B) For Host CountryImport substitutingExport increasingGovernment Initiated
Sequence to develop a Foreign Market for its products.
*Step 3 and 4 requires FDI
Forms of FDIGreenfield InvestmentCross Border Mergers and Acquisitions (M & A)
Joint Ventures
* Brownfield Investment : Investments are formally an acquisition resembling greenfield investment but the investor replaces the plant , labour and the product line of the firm.
Top Investing Countries
Log of GDP = 4.12 + 0.466 Log of FDI