Economics · Foreign Investment
Foreign Direct Investment (FDI) differs fundamentally from Foreign Portfolio Investment (FPI) because:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1FDI involves investment in financial markets, while FPI involves physical assets.
- 2FPI is generally long-term, while FDI is short-term and volatile.
- 3FDI involves acquiring a lasting interest and control/influence in a domestic enterprise, while FPI is passive investment in securities.✓
- 4FPI is always subject to government approval, while FDI is always automatic.
Correct answer
FDI involves acquiring a lasting interest and control/influence in a domestic enterprise, while FPI is passive investment in securities.
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