Liberalisation and mode of entry, Macroeconomics

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Liberalisation and Mode of Entry:

Various new forms of FDI flows have also emerged. Besides mergers and  joint ventures, transactional relationships are emerging such  as licensing,  franchising, management controls, turnkey ventures  and  international subcontracting, strategic alliances etc. This is another important feature of FDI inflows into India during 1990s  is the emergence of mergers and acquisitions  (M & As) as an important channel of FDI inflow. During the period 1997-1999, for instance, nearly 39 per cent of FDI inflows into India have taken the form of M &As  by foreign companies of existing  Indian enterprises.  In the pre-refom period, FDI entry was invariably in the nature of green field investments. This trend may have implications in  terms of additions to  the stock of productive capital, technology transfers, generation of competitive atmosphere  and so on.  

 


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