Foreign direct investment

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Foreign direct investment is a commitment by a country to another to invest a certain amount of money for a long term. It encompasses management, joint venture, transfer of technology and expertises. There are three types of FDI: long term, short term, and stock. FDI excludes short term portfolio investments and investment through the purchases of shares.

A foreign direct investor can acquire 10% or more in the voting power of a company. FDI is particularly a way for developing countries to attract capital and foster economic growth, and many countries attempt to attract FDI through fostering political and macroeconomic stability.