... their products. This report focuses on the firm's choice among export, license and FDI, and the factors for selecting a market entry mode. 2. Foreign direct investment (FDI) 2.1 Foreign Direct Investment Foreign direct investment (FDI) is the direct ownership of facilities in the target country. It involves the transfer of resources including capital, technology, and personnel. Direct foreign investment may be made through the acquisition of an existing entity or the establishment of a new enterprise. A foreign direct investment means acquiring control by owning more than 50 percent of the operation. But in practice, it is possible for any firm to gain effective control by owning less. In any event, a foreign direct investment turns the firm into a multinational enterprise, one that controls operations in more than one country. Joint ventures and wholly owned subsidiaries are two examples of foreign direct investment. 2.2 FDI versus foreign portfolio investment(FPI) It is necessary to ...

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