Foreign Direct Investment (FDI) and Financial Integration

Investment in a country by individuals and organisations from other countries may take the form of direct investment (creation of productive facilities) or portfolio investment (acquisition of securities). Foreign direct investment (FDI) is the outcome of the mutual interests of multinational firms and host countries. The essence of FDI is the transmission to the host country of a package of capital, managerial skills, and technical knowledge. FDI is generally a form of long-term international capital movement, made for the purpose of productive activity and accompanied by the intention of managerial control or participation in the management of a foreign firm. This book attempts to explain and statistically examine the various dimensions of FDI with reference to India. It also includes chapters on portfolio investment, financial integration, international investment position (IIP) of South Asian countries, and international financial integration of high income European Union (EU) countries.