Objectives and types of international investment

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International investments are carried out to achieve both the microeconomic goals of investors (increasing the profitability of assets, expanding sales markets) and the macroeconomic goals of states (modernization of the economy, growth of employment and tax revenues).

According to the criteria of purpose, term and form, the following types of international investments are distinguished :

Foreign direct investment (FDI) is the acquisition by an investor from one country of a controlling stake in a business located in another country. It involves a long-term investment and control over management.
Portfolio investments are the acquisition of securities of foreign companies without giving the right to control them. They are designed to generate income in the form of dividends and growth in the market value in the short term.
Other investments include trade and bank loans to governments and companies, current accounts and deposits in foreign banks, and investments in foreign real estate.
FDI accounts for more than half of global international lebanon whatsapp phone number investment, reflecting the growing role of TNCs in the global economy.



Direct and portfolio international investments
Foreign direct investment (FDI) is considered the most significant form of international capital movement because it provides the investor with managerial control over foreign assets.

Distinctive features of FDI :

a significant share of participation in the capital of the enterprise (usually from 10%);
long-term nature of the relationship between the investor and the investment object;
active participation of TNCs in the strategic management of a foreign enterprise;
transfer of modern technologies, management skills, corporate standards;
focus on developing foreign markets and integrating into global value chains.
FDI is implemented in the form of creating branches of TNCs abroad from scratch (“greenfield”), purchasing an existing foreign business through mergers and acquisitions (M&A), and organizing joint ventures with local firms.

Portfolio foreign investments do not involve the investor's participation in the operational management of the company. These are investments in foreign corporate and government securities: shares, bonds, bills of exchange, bank deposit certificates.

The motive of portfolio investments is to obtain investment income in the form of dividends, interest, speculative profit from the resale of rapidly growing securities. Portfolio investors include banks, mutual funds, hedge funds, and insurers.

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