Outward Direct Investment - ODI

AAA

DEFINITION of 'Outward Direct Investment - ODI'

A business strategy where a domestic firm expands its operations to a foreign country either via a Green field investment, merger/acquisition and/or expansion of an existing foreign facility. Employing outward direct investment is a natural progression for firms as better business opportunities will be available in foreign countries when domestic markets become too saturated.

INVESTOPEDIA EXPLAINS 'Outward Direct Investment - ODI'

The increase of a nation's outward direct investment can be seen as a proxy that the nation's economy is booming to the extent that sufficient risk capital is available for further ventures. For example, in the 1990s foreign firms entered China and gave a large influx of foreign capital into the Chinese economy. As a result of subsequent economic activity in the years to come, China's economy flourished to the point where Chinese companies now engaged in large scale outward direct investments. In fact, in 2005 Chinese companies spent over $6.9 billion in ODI.

RELATED TERMS
  1. Acquisition

    A corporate action in which a company buys most, if not all, ...
  2. Foreign Direct Investment - FDI

    An investment made by a company or entity based in one country, ...
  3. Foreign

    1. A non-U.S. company with securities trading on the North American ...
  4. Green Field Investment

    A form of foreign direct investment where a parent company starts ...
  5. Special Economic Zone - SEZ

    Designated areas in countries that possess special economic regulations ...
  6. Lean Six Sigma

    Lean Six Sigma is a managerial approach that combines Six Sigma ...
Related Articles
  1. What Is The World Trade Organization?
    Economics

    What Is The World Trade Organization?

  2. How do businesses decide whether to ...
    Forex

    How do businesses decide whether to ...

  3. Why would a multinational corporation ...
    Investing

    Why would a multinational corporation ...

  4. Understanding S Corporations
    Investing Basics

    Understanding S Corporations

comments powered by Disqus
Hot Definitions
  1. Odious Debt

    Money borrowed by one country from another country and then misappropriated by national rulers. A nation's debt becomes odious ...
  2. Takeover

    A corporate action where an acquiring company makes a bid for an acquiree. If the target company is publicly traded, the ...
  3. Harvest Strategy

    A strategy in which investment in a particular line of business is reduced or eliminated because the revenue brought in by ...
  4. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  5. Pareto Principle

    A principle, named after economist Vilfredo Pareto, that specifies an unequal relationship between inputs and outputs. The ...
  6. Pareto Principle

    A principle, named after economist Vilfredo Pareto, that specifies an unequal relationship between inputs and outputs. The ...
Trading Center