Distinguish Between Foreign Trade And Foreign Investment
Distinguish Between Foreign Trade And Foreign Investment
Know about Foreign Trade & Investment and distinguish between foreign trade and foreign investment. on basis of Meaning, types, movements & benefits.

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In this digitalized world globalization is an integral phenomenon. When it comes to globalization – production, selling, and investing across countries have become an important phenomenon.

The process of globalization has integrated the markets all around the globe and has made the world one family where everyone is connected with each other. Therefore, MNCs and foreign trade can be considered agents of globalization.

With the increase in foreign investment by MNCs, the role of foreign trade is also increasing because of which we are observing the integration of production and market across countries.


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What is Foreign Trade?

Foreign Trade is the purchase and sale of goods and services across international borders. With globalization, the markets all across the world have become interconnected and interlinked and it has further enabled the role of foreign trade.

No country has all the resources at its disposal, some countries have one or the other resource in abundance to other countries. So, in order to fulfill their needs, one country imports a commodity that they have in scarcity from other countries which have it in excess and it forms the basis of foreign trade.


Foreign Investment

Foreign Investment means the inward flow of capital through which foreign companies or individuals invest in developing countries to take benefit of cheaper resources and a dynamic business environment.

Foreign Investment is another form of international business. Through this type of investment, foreign entities or individuals set up their businesses or manufacturing units in other countries or get a share in the existing businesses of other countries. The inflow of modern technologies and resources are some of the main advantages of foreign investment which is one of the major reasons why governments try to attract more foreign investment.  


 Know the Distinguish Between Foreign Trade And Foreign Investment