International Business for E&BE
(University of Groningen)
Summary 2022-2023
Stuvia: marcellaschrijver
6. Investing Abroad Directly................................................................................................................... 2
OLI Advantages via FDI....................................................................................................................... 4
Political views on FDI ......................................................................................................................... 5
Benefits and costs of FDI .................................................................................................................... 5
9. Growing and Internationalizing the Entrepreneurial Firm ............................................................... 7
Internationalization strategies for entrepreneurial firms ................................................................ 8
10. Entering Foreign Markets................................................................................................................. 9
Where? ............................................................................................................................................... 9
When? ............................................................................................................................................... 10
How? ................................................................................................................................................. 10
11. Managing Global Competitive Dynamics ...................................................................................... 13
12. Making Alliances and Acquisitions Work ...................................................................................... 15
13. Strategizing, Structuring, and Learning Around the World .......................................................... 19
14. Competing on Marketing and Supply Chain Management........................................................... 21
16. Financing and Governing the Corporation Globally ...................................................................... 23
17. Managing Corporate Social Responsibility Globally ..................................................................... 26
, 6. Investing Abroad Directly
FPI (Foreign Portfolio Investment)
Investment in a portfolio of foreign securities (stocks and bonds) that does not entail the active
management of foreign assets
FDI (Foreign Direct Investment)
Directly managing/controlling/investing in value-added activities abroad
UN definition: Equity stake of 10% or more in a foreign-based enterprise
Why does FDI take place?
- Management control rights
Right to appoint key managers and establish control mechanisms
- Market access
- Reducing production costs
MNE (Multinational Enterprise)
Firms that engage in FDI
What sets MNEs apart from non-MNEs is FDI
Non-MNE firms can also do business abroad by
- Exporting & importing
- Licensing & franchising
- Outsourcing
- FPI
Value Chain
Horizontal FDI
Duplication of a firms’ home-based activities at the same value chain stage in a host country
(University of Groningen)
Summary 2022-2023
Stuvia: marcellaschrijver
6. Investing Abroad Directly................................................................................................................... 2
OLI Advantages via FDI....................................................................................................................... 4
Political views on FDI ......................................................................................................................... 5
Benefits and costs of FDI .................................................................................................................... 5
9. Growing and Internationalizing the Entrepreneurial Firm ............................................................... 7
Internationalization strategies for entrepreneurial firms ................................................................ 8
10. Entering Foreign Markets................................................................................................................. 9
Where? ............................................................................................................................................... 9
When? ............................................................................................................................................... 10
How? ................................................................................................................................................. 10
11. Managing Global Competitive Dynamics ...................................................................................... 13
12. Making Alliances and Acquisitions Work ...................................................................................... 15
13. Strategizing, Structuring, and Learning Around the World .......................................................... 19
14. Competing on Marketing and Supply Chain Management........................................................... 21
16. Financing and Governing the Corporation Globally ...................................................................... 23
17. Managing Corporate Social Responsibility Globally ..................................................................... 26
, 6. Investing Abroad Directly
FPI (Foreign Portfolio Investment)
Investment in a portfolio of foreign securities (stocks and bonds) that does not entail the active
management of foreign assets
FDI (Foreign Direct Investment)
Directly managing/controlling/investing in value-added activities abroad
UN definition: Equity stake of 10% or more in a foreign-based enterprise
Why does FDI take place?
- Management control rights
Right to appoint key managers and establish control mechanisms
- Market access
- Reducing production costs
MNE (Multinational Enterprise)
Firms that engage in FDI
What sets MNEs apart from non-MNEs is FDI
Non-MNE firms can also do business abroad by
- Exporting & importing
- Licensing & franchising
- Outsourcing
- FPI
Value Chain
Horizontal FDI
Duplication of a firms’ home-based activities at the same value chain stage in a host country
