Foreign direct investment

High school (ages 12+)
People & Society

Name:

Date:

Step 1 · Read the article

Open the article and read it at the level above. Then answer the questions below in your own words.

https://smallwhale.org/articles/foreign-direct-investment

1. What is the defining characteristic?
2. What is the investment modes?
3. Why do companies invest in other countries?
4. How does foreign direct investment help the country that gets the investment?

Write what each word means, using the article.

Do not copy the article. Write two things you learned, the way you would explain them to a friend.

Answers below are taken from the article’s stored facts, so they match what the student read.

1. What is the defining characteristic?An investment that provides a controlling interest in a foreign enterprise
2. What is the investment modes?Includes greenfield investments (new facilities) and acquisitions (buying existing firms)
3. Why do companies invest in other countries?Companies invest abroad to reach new customers, find cheaper materials or workers, and use new technology. It also helps them avoid trade barriers and grow their business.
4. How does foreign direct investment help the country that gets the investment?It brings money, new technology, and better management skills. It can create jobs, teach people new skills, and make products cheaper and more varied for shoppers.

Foreign Direct Investment (FDI): A controlling ownership in a business enterprise in one country by an entity based in another country.
Greenfield Investment: The establishment of new facilities from the ground up in a foreign country.
Acquisition: The purchase of an existing company or a controlling stake in it in a foreign country.