Strategic and long-term factors
Some strategic and long-term factors are considered as being instrumental to the decision to indulge in FDI.These factors are as follows:
● the desire on the part of the investor to defend existing foreign markets and foreign investments against competitors;
● the desire to gain and maintain a foothold in a protected market or to gain and maintain a source of supply that may prove useful in the long run;
● the need to develop and sustain a parent-subsidiary relationship;
● the desire to induce the host country into a long commitment to a particular type of technology;
● the advantage of complementing another type of investment;
● the economies of new product development;
● competition for market shares among oligopolies and the concern for the strengthening of bargaining positions.