MANAGEMENT

Detailed explanation-1: -FDI can take two different forms: Greenfield or mergers and acquisitions (M&As). mergers and acquisitions amounts to transferring the ownership of existing assets to an owner abroad. In a merger, two companies are merged to form one, while in an acquisition one company is taken over by another.

Detailed explanation-2: -Foreign direct investments are commonly categorized as horizontal, vertical, or conglomerate. With a horizontal FDI, a company establishes the same type of business operation in a foreign country as it operates in its home country. A U.S.-based cellphone provider buying a chain of phone stores in China is an example.

Detailed explanation-3: -Accordingly, FDI is driven by four main factors: (i) markets; (ii) assets; (iii) natural resources; and (iv) efficiency seeking.