Foreign Direct Investment vs Portfolio (indirect) Investment
3 thoughts on “Foreign Direct Investment vs Portfolio (indirect) Investment”
Direct†’ implies directly participating (such as building a factory in another country and directly engaging in this host country's economy)
Indirect†’ implies simply using capital to buy stock market or government bonds and has a tendency to be a bit more controversial.
With actual sentences, this is a 4/4.
In general, foreign investment is welcomed by developing countires. However, it also poses risks to state sovereignty (claimed by mercantalists and economic nationalists). Also, foreign direct investment is valued by developing countries not only for its tangible goods, like factories, but for its augmentation of human capital through education/training/etc. Economic nationalists in the investing country oppose foreign investment.
Direct†’ implies directly participating (such as building a factory in another country and directly engaging in this host country's economy)
Indirect†’ implies simply using capital to buy stock market or government bonds and has a tendency to be a bit more controversial.
With actual sentences, this is a 4/4.
In general, foreign investment is welcomed by developing countires. However, it also poses risks to state sovereignty (claimed by mercantalists and economic nationalists). Also, foreign direct investment is valued by developing countries not only for its tangible goods, like factories, but for its augmentation of human capital through education/training/etc. Economic nationalists in the investing country oppose foreign investment.