Abstract
Defined narrowly, foreign investment is the act of acquiring assets outside one’s home country. These assets may be financial, such as bonds, bank deposits and equity shares or they may be so-called direct investment and involve the ownership of means of production such as factories and land. Direct investment is considered to take place also if the ownership of equity shares provides control over the operation of a firm. Johnson (1970) has suggested the expansion of the concept of foreign investment so that it parallels the modern Fisherian approach and distinguishes physical, human and knowledge capital. Accordingly, schooling abroad and technology transfers through the purchase of patents and licences represent foreign investment broadly defined.
This chapter was originally published in The New Palgrave: A Dictionary of Economics, 1st edition, 1987. Edited by John Eatwell, Murray Milgate and Peter Newman
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Grubel, H.G. (1987). Foreign Investment. In: The New Palgrave Dictionary of Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-95121-5_597-1
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DOI: https://doi.org/10.1057/978-1-349-95121-5_597-1
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