Skoda Stakeholders

Foreign direct investment FDI is an investment of a company from one country to another whereby assets are acquired, operations are set up and joint ventures with local firms are made (Financial Times , n.d.). FDI is a risky and more expensive method of venturing globally as compared to licensing and exporting, however it does not stop companies from doing so due to its many advantages. FDI is one of the key drivers in speeding up the development and economic growth in Malaysia. Sound macroeconomic management, presence of a well-functioning financial system and sustained economic growth has made Malaysia an attractive country for FDI. Moreover, FDI plays a crucial role in Malaysia economy as it generates economic growth by increasing capital formation through the expansion of production capacity.

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.

Foreign Direct Investment is ownership in a global company which is controlled by a company in base country (Dunning 2000). FDI is having some purposes which are company exact-benefit, struggles removal, and global strategy formulation. FDI is giving three advantages such as internalizing advantages, location advantages, and ownership advantages. Zara has advantages in ownership which support its global development. Zara wants to have full control of its company globally, which is one of the advantages of location by Zara. By doing this Zara can get information about all country and get knowledge from it. Last but not least, internalizing gives Zara about some insight and information for its market entry globally (Polo & Flavian 2000; Dunning 2000).

Foreign Direct Investment refers to the type of investment into a country that is characterized by the inflow of funds from a foreign source that can be in the form of ownership such as stocks, bonds, infrastructural presence, etc. by the element of ‘control’. FDI is defined as the net inflows of investment to acquire a management interest (10 percent or more of voting stock) in an enterprise operating in an economy other than that of the investor.

Foreign direct investment (FDI) can be defined as a process whereby residents of one country (the source country) acquire ownership of assets for the purpose of controlling the production, distributions and other activities of a firm in another country (the host country). FDI also have another definition like ‘an investment that is made to acquire a lasting interest in an enterprise operating in an economy other than that of the investor, the investor’s purpose being to have an effective voice in the management of the enterprise’- International Monetary Fund’s Balance of Payment Manual and ‘ an investment involving a long-term relationship and reflecting a lasting interest and control of a resident entity in one economy (foreign

Access to resources: FDI is also an effective way for you to acquire important natural resources, such as precious metals and fossil fuels. Oil companies, for example, often make tremendous FDIs to develop oil fields.

The Volkswagen Group is one of the world’s largest and leading automobile manufacturers and the largest carmaker in Europe headquartered in Wolfsburg (The Group, 2013). In 2013, Volkswagen managed to increase the number of vehicles delivered to customers from 9.276 million to 9.731 million that corresponds to a 12.8 percent share of the world passenger car market (The Group, 2013). One in four cars in Western Europe is made by Volkswagen; the sales revenue was €197 billion and profit after tax was €9.1 billion (The Group, 2013). Volkswagen Group in total consist of 12 auto brands from Europe, and these brands are Volkswagen Passenger Cars, Audi, SEAT, ŠKODA, Bentley, Bugatti, Lamborghini, Porsche, Ducati, Volkswagen

FDI in a developing economy means the development of the entire national economy on a grand scale, benefiting several other support industries, development of the country 's infrastructure, raising standards of living and increasing per capita income. World-leading manufacturers on

Modern communications infrastructure makes it possible for anyone with a bank account to make a “foreign portfolio investment” (FPI). Rich and poor alike can gain from this ability to trade stocks and bonds overseas with speed and ease. For those with sufficient resources, however, a “foreign direct investment” (FDI) can also be made. While both types of investment can be lucrative for the investor, I believe that foreign direct investments are usually better for the country receiving the investment, and so FDIs should be the favored form of investment for those with the means to make them.

FDI is further defined as “a category of cross-border investment made by a resident in one economy (the direct investor) with the objective of establishing a lasting interest in an enterprise (the direct investment enterprise) that is resident in an economy other than that of the direct investor” (OECD, 2008, p. 17).

FDI plays in the economic growth process of the host country. A good number of the studies and discussions show that there exists a strong correlation between FDI and economic progression. In addition to being an engine for diffusion of knowledge and transfer of technology, FDI also stimulates international trade, domestic investment, expands host nation 's domestic savings, and increases the host country 's foreign exchange reserves adjusting its Balance of Payment post. These factors increase the economic growth of the host nation.

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.

In the recent time, significant rise of outward foreign direct investment (FDI) was witnessed from developing countries like China and India. The Organisation for Economic Co-operation and Development (OECD) defines FDI as an investment that reflects the objective of establishing a lasting interest or long-term relationship by a resident enterprise in one economy (direct investor) in an enterprise (direct investment enterprise) that is resident in an economy other than that of the

Economists believe that Foreign Direct Investments is an essential part of economic evolution in every country. There are many academic papers that attempt to assess FDI aspects. Despite many researchers have tried to give an accurate explanation to FDI, there is no comprehensively approved theory. FDI motivations have been mainly researched by John Dunning, Stephen Hymer, Raymond Vernon, etc.

FDIs are private-sector investments that are made by a company into a foreign country. Foreign direct investments create a strong demand for a local currency and help boost the economy. With money coming into a country, strong foreign direct investment is one way governments can finance current account deficits. However, just as funds flow in, they also can flow out,