Foreign direct investment
What Foreign direct investment means in Economics B A-Level, as defined for Pearson Edexcel.
Definitions of Foreign direct investment
Exam boards and our study guides word this term in slightly different ways. Learn the version your board uses.
Check what you remember
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Reference: Pearson Edexcel
Investment flows in which a multinational corporation might build a factory in a developing nation to access new markets or lower production costs.
Capital injected into the host economy by MNCs, creating employment and generating a positive multiplier effect on economic growth.
Topics that use Foreign direct investment
- Globalisation (Pearson Edexcel A-Level)
- The impact of multinational corporations (MNCs) (Pearson Edexcel A-Level)
Related terms
- Balance of payments
- Business competition and supply chains
- Environmental externalities and sustainability
- Globalisation
- International trade
- Labour markets and exploitation
- Technological change
- Transnational corporations
Using Foreign direct investment in the exam
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