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It is advisable for many firms to participate in foreign direct investment, it can provide a source of new technologies, capital, processes and products. A desire to maintain share of a market should be incentive enough to support foreign direct investment. Foreign direct investment has also ensured a number of employment opportunities by aiding the setting up of industrial units in the host country. A basic requirement that a firm should take into account when considering a foreign direct investment is need for competitiveness. By participating in foreign direct investment, a firm might receive benefits in form of tax concessions. Foreign direct investment is able to help firms to become more actively involved in international business activities. Foreign direct investment could provide higher profits through decreased operation costs in the host country.
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