Comparison between FDI and FPI

What is invested:Involves the transfer of non-financial assets and intellectual capital, in addition to financial assets.Only investment of financial assets.
Stands for:Foreign Direct InvestmentForeign Portfolio Investment
Volatility:Having smaller in net inflowsHaving larger net inflows
Management:Projects are efficiently managedProjects are less efficiently managed
Involvement - direct or indirect:Involved in management and ownership control; long-term interestNo active involvement in management. Investment instruments that are more easily traded, less permanent and do not represent a controlling stake in an enterprise.
Sell off:It is more difficult to sell off or pull out.It is fairly easy to sell securities and pull out because they are liquid.
Comes from:Tends to be undertaken by Multinational organisationsComes from more diverse sources e.g.a small company's pension fund or through mutual funds held by individuals; investment via equity instruments (stocks) or debt (bonds) of a foreign enterprise.

Previous Post
Next Post