Define International Investment
International investment refers to any monetary participation in a country other than the investor's own. This can happen on any scale, from a foreign national setting up a small business to a major corporation buying out a company based in a foreign country. Economic treaties, such as NAFTA, and protectionist measure, such as tariffs, regulate international investment.
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International Stock Trading
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It is common for people to trade stocks internationally; U.S. citizens often use investment vehicles such as American depositary receipts (ADRs) to trade foreign stock in U.S. dollars on U.S. markets. This method is popular, according to a 2007 article in "USAToday," as the ADR holder doesn't have to directly deal with foreign currencies. Some brokerage firms also allow customers to trade directly on foreign markets. An example would be a U.S. citizen trading stocks on the Shanghai stock exchange via an online broker.
International Partnerships
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Companies from different countries can form international partnerships. This has happened in the airline industry, where airline alliances such as the Star Alliance, SkyTeam and Oneworld have consolidated resources to streamline customer services. This is an example of an international cartel, as ownership remains in the hands of the individual airlines. In other cases, two companies based in separate countries might forge a joint venture. According to Ford Motors, this occurred when Ford Motors and Mazda formed a joint-venture car plant in Flat Rock, Michigan that they called the AutoAlliance International; each company has a 50 percent stake in the plant.
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Establishment in Foreign Markets
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A company in one country may establish brands and subsidiaries in foreign countries. McDonald's, which reports operations in 119 countries while headquartered out of the United States, is an example of a U.S. company extensively established internationally. News Corp, whose CEO, Rupert Murdoch, founded FoxNews, is an example of an Australian company that formed a major brand for the American marketplace (although the company is now headquartered in the United States, according to the BBC).
Labor Outsourcing
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A company may shift its source of labor to countries with lower labor costs to save money. This includes the Gap Inc. garment factories in Vietnam and Cambodia, and Honda's automobile factories in the United States, which, according to Honda, began in 1979 in Marysville, Ohio. These companies effectively invest in the host country's economy by paying foreign workers and purchasing capital resources from local sources.
Small Businesses Abroad
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Sometimes a citizen of one country travels to another country to establish a small-scale business, often with local partners. In these cases, the owner entirely incorporates the business in the host country, but the owner is a foreign national using start-up capital from abroad. An example of this would be an American man married to a Thai woman opening a bar in Bangkok with his wife as a partner.
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