Foreign direct investment
What Foreign direct investment means in Economics A-Level, as defined for AQA.
Definitions of Foreign direct investment
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Reference: AQA
A transaction involving financial assets and liabilities recorded in the financial account, classified strictly within that account rather than the capital account.
Investment that multinational corporations drive as primary catalysts for globalisation, alongside establishing complex global supply chains.
Long-term physical capital investment in a host country that injects capital, creates employment and facilitates technology transfer.
Investment that corruption and weak institutional factors deter.
Topics that use Foreign direct investment
- Economic growth and development (AQA A-Level)
- Globalisation (AQA A-Level)
- The balance of payments (AQA A-Level)
Related terms
- International trade
- Globalisation
- Balance of payments
- Capital account
- Competitiveness
- Current account
- Current account deficit
- Economic development
Using Foreign direct investment in the exam
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