On evaluation of FDIs: principles, actualities and possibilities

As business internationalises, Foreign Direct Investments (FDIs) become more a part of every major organisation's life. Evaluation of such FDIs in turn becomes important. This paper forms part of the output from a study whose aim was to answer the question, "How should FDIs be evaluated or assessed what kind of models are/should be employed in this process?" A-priori considerations and a subsequent survey of UK top 250 listed companies produced a set of six major "contextual" factors which it is argued should be evaluated in conjunction with the core financial appraisal which will undoubtedly take place for any given project or proposal. The paper examines each of the six factors in turn, describing its fundamental importance to the overall process; how the sample companies actually treated it; and how one could, or should, assess it. This structure gives rise to the wording of the title. The paper concludes with a section which discusses how the factors might be put together, along with the financial appraisal, to best inform ultimate corporate decision makers, together with some suggestions for further research in the area.