This section examines several leading theories that attempt to explain why firms choose to invest in foreign markets rather than use

alternatives such as licensing or exporting. FDI includes both ownership and control of real or physical assets such as plants and other

facilities. It does not include other types of international investment such as portfolios of stocks, bonds, or other forms of debit. FDI can

take place through greenfield investment, the establishment of new facilities from the ground up$,$ or cross$-$border acquisition, the purchase of

an existing business in another nation. We usually assume that strategic motives are the driving force for decisions to invest abroad, such as

the desire to find new markets, access raw materials, achieve production efficiencies, gaih access to new technologies or managerial

expertise, enhance political safety of the firm's operations, or respond to competitive or other pressures in the external environment. ${?}^{55}To$

be successful with their foreign investment activities, firms must possess advantages not available to local firms in order to overcome

liabilities associated with being a foreigner$-$such as lack of knowledge about local market conditions, increased costs of operating at a