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A market analysis is the best way to start off, when firms are considering foreign direct investment. Host countries receive new technology when a firm decides to partake in foreign direct investment. Foreign direct investment may prove to be the best way to expand foreign markets when licensing seems unsafe. 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. Access to potential consumers may be established if a firm decides to participate in foreign direct investment. Countries that receive foreign direct investment can develop the human capital resources by getting their employees to receive training on the operations of a particular business.
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