introduction to MNC's
1.1 Introduction
2 JV/MNCs in Nepal
Foreign direct investment (FDI) is defined as a long-term investment by a foreign investor in an enterprise resident in an economy other than that in which the foreign direct investor is based. The FDI relationship consists of a parent enterprise and a foreign affiliate, which together form a trans-national company/corporation (TNC). In order to qualify as FDI the investment must afford the parent enterprise control over its foreign affiliate. The United Nations
(UN) defines control in this case as owning 10 percent or more of the ordinary shares or voting power of an incorporated firm, or its equivalent for an unincorporated firm
(http://www.en.wikipedia.org/wiki/Foreign_direct _investment).
In the years after World War II, while much of the world recovered from the destruction wrought by the conflict, global FDI was dominated by the United States (US). The
US accounted for around three-quarters of new FDI
(including reinvested profits) between 1945 and 1960. Since that time, FDI has spread to become a truly global phenomenon, no longer the exclusive preserve of Organization for
Economic Co-operation and Development (OECD) countries.
FDI has grown in importance in the global economy and FDI stocks now constitute over 20 percent of global gross domestic product (GDP). In the last few years the emerging market countries, such as China and India, have become the most favoured destinations for FDI and investor confidence in these countries has soared. As per the FDI Confidence Index for 2005, compiled by A.T.
Kearney, China and India hold the first and second position respectively, whereas the United States has slipped to third position. FDI is a broad term used to denote different forms of foreign investment including financial, technical and managerial, including trade-mark. In specific terms, FDI enterprises are categorized into multinational companies
(MNCs) or joint venture
2 JV/MNCs in Nepal
Foreign direct investment (FDI) is defined as a long-term investment by a foreign investor in an enterprise resident in an economy other than that in which the foreign direct investor is based. The FDI relationship consists of a parent enterprise and a foreign affiliate, which together form a trans-national company/corporation (TNC). In order to qualify as FDI the investment must afford the parent enterprise control over its foreign affiliate. The United Nations
(UN) defines control in this case as owning 10 percent or more of the ordinary shares or voting power of an incorporated firm, or its equivalent for an unincorporated firm
(http://www.en.wikipedia.org/wiki/Foreign_direct _investment).
In the years after World War II, while much of the world recovered from the destruction wrought by the conflict, global FDI was dominated by the United States (US). The
US accounted for around three-quarters of new FDI
(including reinvested profits) between 1945 and 1960. Since that time, FDI has spread to become a truly global phenomenon, no longer the exclusive preserve of Organization for
Economic Co-operation and Development (OECD) countries.
FDI has grown in importance in the global economy and FDI stocks now constitute over 20 percent of global gross domestic product (GDP). In the last few years the emerging market countries, such as China and India, have become the most favoured destinations for FDI and investor confidence in these countries has soared. As per the FDI Confidence Index for 2005, compiled by A.T.
Kearney, China and India hold the first and second position respectively, whereas the United States has slipped to third position. FDI is a broad term used to denote different forms of foreign investment including financial, technical and managerial, including trade-mark. In specific terms, FDI enterprises are categorized into multinational companies
(MNCs) or joint venture