07 Aug Differences Between FDI and FII
The significant differences between FDI and FII are explained :
Foreign Direct Investment or FDI is defined as the investment made by a company in the company situated outside the country. Foreign Institutional Investor or FII is when investors, most commonly in the form of institutions that invest in the country’s financial market.
FII is a way to to make quick money, the entry and exit to the stock market are very easy. On the other hand, the entry and exit are not easy in FDI.
FDI brings long-term capital in the investee company whereas FII may bring long or short term capital in the country.
In the case of FDI, there is the transfer of funds, resources, technology, strategies, know-how. Conversely, FII involves the transfer of funds only.
FDI increases job opportunities, infrastructural development in the investee country and thus leads to economic growth, which is not in the case of FII.
FDI results in the increase in the country’s productivity. As opposed to FII that results in the increase in the country’s capital.
FDI targets a particular company, but FII does not target a particular company.
FDI obtains management control in the company. However, FII does not enable such control.