Openness And Foreign Direct Investment

Countries would participate in foreign direct investments because it helps in the economic development of the country where the investment is being made. They also engage in FDI to reduce production costs.

According to Eryigit (2012), “Foreign direct investment (FDI) is defined as establishing a new company or branch of a foreign company by foreign investor or share acquisitions of a company established in host country (any percentage of shares acquired outside the stock exchange or 10 percent or more of the shares or voting power of a company acquired through the stock exchange”. According to Fadli, Norazidah, Rhaudhah, Nurul, Salwani and Kamaruzaman (2011), stated that Malaysia one of the developing country that being openness to foreign country in order to attract foreign investor to maintain an accelerate growth to this country. They also stated that foreign direct investment plays an important role in capital formulation and economy growth

Investments can be categorized as Foreign Direct Investment (FDI) and Foreign Indirect Investment (FII), where Foreign Direct Investment is venturing into an economic activity outside the economy of the investor. It is referred to as Direct Investment because the investor whether as a person or as a company has a direct long term interest in another country's company either through purchase or building and getting involved in the management and control of the operations. An investment qualifies as an FDI when the investor has acquired the voting rights by obtaining 10% of the issuer's common stock.

Foreign Direct Investment (FDI) is a venture made by an organization or element situated in one nation, into an organization or substance situated in an alternate nation. Outside immediate ventures vary generously from aberrant speculations, for example, portfolio streams, wherein abroad establishments put resources into values recorded on a country's stock trade. Elements making immediate ventures commonly have a huge level of impact and control over the organization into which the speculation is made. Open economies with talented workforces and great

Foreign Direct Investment (FDI) improved from 6.5% of the world’s GDP in 1980 to 31.8% in 2006.

FDI has broadened its meaning into the acquisition of a lasting management interest in a firm outside the investing enterprise’s home country. For the reason above, it comes in different forms which include direct acquisition of foreign companies, construction of a factory in a foreign country and investment in joint ventures. Britton and Worthington (2009) described FDI as an important aspect of globalisation as well as the activities of multinational companies.

FDI is where the MNE invests directly in production or other facilities over which it has effective control in a host economy (j &t). According to Pollan (), the definition of the terms “investment” is highly significant to Foreign Direct Investment, which can be typical comprehend as the conveyance of capital to a country. Investment can be defined as money committed or property acquired in order to gain profitable returns, as interest, future income or appreciation in value (business dictionary, 2014). The commonest definition used to understand the idea of FDI is the definition provided by International Monetary Fund’s (IMF). The IMF definition of FDI introduces systems and structures which clearly demarcates foreign direct investment from portfolio investment. According to the IMF, direct investment creates a lasting interest in an enterprise, consisting of a long-term relationship between the investor and the enterprise and that the investor has an outstanding amount of control on the management of the enterprise, while portfolio investment does not create an extended relationship and the portfolio investor is rarely directly partaking in the day-to-day management of the enterprise (Pollan,). FDI however has no comprehensive, authoritative and ubiquitous legal definition and the test for the existence of enough degree of control differs in scope depending on applicable law in a

Foreign direct investment (FDI) in context of Pakistan is one of the major contributors that help Pakistan to minimize the gap of financial resources and funds. FDI has played a significant and vital role in the domestic markets of

Foreign Direct Investment as seen as a main source of non-debt inflows and is increasing being required as a vehicle for technology flows and as a means of attaining competitive efficiency by creating a meaningful network of global interconnections. FDI plays a critical role in the economy since it does not only give opportunities to host countries to enhance their economic development but also opens new vistas to home countries to optimize their earnings by employing their ideal resources.

Foreign Direct Investment is the investment of a country domestic assets into foreign structures, equipment and organizations, but does not include investment into stock markets. Foreign direct investment reflects the objective of obtaining a lasting interest by a resident entity in one economy (direct investor) in an entity resident in an economy other than that of the investor (direct investment enterprise). The lasting interest implies the existence of a long-term relationship between the direct investor and the enterprise and a significant degree of influence on the management of the enterprise. Direct investment involves both the initial transaction between the two entities and all subsequent capital transactions between them and among affiliated enterprises, both incorporated and unincorporated.

The advent of globalisation has influenced the scope of economic growth for countries in a rapid manner. It has also notified that with globalisation, the business sector has been able to experience considerable benefits from international domain. The concept of Foreign Direct Investment (FDI) has been gain huge prominences in the recent years for getting considerable benefits for the economy and overall development of a nation. The importance of FDI has been attaining huge prominences among the economic as well as business domain. FDI is one kind of investment that influences the overall economic functioning within a country. FDI is mainly accompanied by multinational companies (MNCs)

Foreign Direct Investment (FDI) refers to ownership of physical productive assets in the recipient country. It can be seen as the sum of the following components;

A Foreign Direct Investment is basically an ownership in a business in a country by a totally different country. Foreign Direct Investment (FDI) plays a very important role in the development of a nation. All countries need FDI’s but in the case of underdeveloped or developing nations FDI is one of the most important aspect, as this kind of investment is required to help sustain the growth of the economy. This inturn helps improving the balance of payments and also helps in generating employment in the country. FDI also helps to improve productivity and use the available resourecs to the maximum.

Foreign Direct Investment is the investment of a country domestic assets into foreign structures, equipment and organizations, but does not include investment into stock markets. Foreign direct investment reflects the objective of obtaining a lasting interest by a resident entity in one economy (direct investor) in an entity resident in an economy other than that of the investor (direct investment enterprise). The lasting interest implies the existence of a long-term relationship between the direct investor and the enterprise and a significant degree of influence on the management of the enterprise. Direct investment involves both the initial transaction between the two entities and all subsequent capital transactions between them and among affiliated enterprises, both incorporated and unincorporated.

Foreign direct investment (FDI) in its classic form is defined as a company from one country making a physical investment into building a factory in another country. It is the establishment of an enterprise by a foreigner. More specifically, foreign direct investment is a cross-border corporate governance mechanism through which a company obtains productive assets in another country .Its definition can be extended to include investments made to acquire lasting interest in enterprises operating outside of the economy of the investor.