Okuzeka
Economics vocabulary · Trade and Exchange Rates

Foreign direct investment

Meaning in economics, with examples

nounCommon term

In economics, foreign direct investment means: Investment by a company from one country that gives it a lasting interest and control in a business in another country, such as building a factory.

In Turkish: doğrudan yabancı yatırım, DYY

How it is used

Usually shortened to FDI. Statistics normally count a stake of 10% or more as direct investment; smaller purchases of shares are portfolio investment. Countries attract, encourage or compete for FDI, and inflows and outflows are reported every year.

Example sentences

  1. Foreign direct investment in the car industry created thousands of jobs in the region.

  2. The government cut red tape to attract more foreign direct investment.

Common collocations

  • attract FDI
  • FDI inflows
  • foreign direct investment in
  • greenfield investment
  • balance of paymentsA record of all money flows between a country and the rest of the world over a period, divided into the current account and the capital and financial account.
  • current account deficitA shortfall that arises when a country pays more to the rest of the world for goods, services, income and transfers than it receives.
  • emerging marketA middle-income economy that is growing and industrialising quickly and opening up to foreign trade and investment, such as Brazil, India or Türkiye.
  • developing countryA country with a lower average income, less industrial output and weaker infrastructure than the rich industrialised countries.

More terms: Trade and Exchange Rates

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This page explains English vocabulary for learners. It is not financial advice.