ABSTRACT
This chapter discusses dramatic rise in nominal foreign direct investment (FDI) in the latter half of the twentieth century. With the extreme globalization that has occurred around the world, FDI seems less noteworthy today. Companies that wish to acquire production assets in a foreign market have the choice to do so through Greenfield direct investment, Brownfield direct investment, portfolio investment, joint ventures, or licensing to local companies. The most basic inputs to production are land, labor, and capital. Recent economics works have added factors such as human capital, social capital, and technological inputs. The need for international investors to pay bribery and deal with extortion by corrupt bureaucrats tends to increase with the frequency and the extent of their interactions with local bureaucrats. The Volkswagen created a company value system, tried to support leadership in the values, and created an anti-corruption officer position who reported to the board of directors.
