According to Nwadikom (1985), foreign investment is that type investment whether real or financial assets across the national boundaries of the investors. It can be undertaken by individual firm or government. Basically, there are two types of investment. Portfolio investment is that investment in which the in which the investors do not have control over the financial assets such as bound and stocks.
On the other hand, direct investment is an investment in a control where the investors have control over their investment. It usually takes the form of foreigners setting upon subsidiaries or taking over existing firms in the country. Uzoma (1998) asserted that foreign investment involves the internalization of products in order to serve markets, which were served by exports.
Also Casson (1990), asserted that foreign direct investment is distinguished by the fact that it involves not only foreign ownership but also foreign control. In order words, foreign direct investment occurs only if individual or organization in foreign country gains sufficient interest in an operation to acquire control.
Therefore, foreign direct investment as a concept differs from international or foreign investment, which is a wider concept. Thus, by the way of an example individuals or an organization from Britain, were to buy stock in any amount of long term or short term in any amount of long term or short term in Nigeria, then, a foreign investment would take place through any combination of the transactions but these types of assets are non-moving assets, therefore, the transactions are non-foreign direct investment.
According to International monetary fund, foreign direct investment is defined as an investment that is made to acquire long lasting interest in an enterprise operating in an economy order than that of investors.
The investors purposes is to have an effective voice in the management of the enterprise that makes up the investment enterprise.
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