Economies in Asia and Latin America have been a target for two main forms of Foreign Direct Investment (FDI) by Multi National Enterprises (MNEs). Briefly describe the two main forms of FDI and the likely benefits of these to the host economies.

Acquisitions

The MNE obtains a local company and so gains control of its assets and markets. The acquired company becomes a division of the latest parent organisation. The local economy only advantages if the company was in danger of imminent collapse and had been 'saved' or was facing other significant difficulties that were subsequently solved by the buy-out. Under these circumstances the MNE will be giving continued employment.

Greenfield investment

Under this form of FDI, the MNE makes new facilities in the host country to take benefit of local conditions. The host country benefits by new employment opportunities and acquires improved skills and knowhow from the MNE as well as access to the global economy. The domestic economy should advantage from any infrastructure improvements made by the MNE, new jobs and income earned by any local suppliers.