A type of FDI in which firms move upstream or downstream in different value chain stages in a host county is identified as:

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Vertical FDI involves a company investing in a different stage of the value chain in a host country. This could mean moving upstream to acquire suppliers or downstream to acquire distribution channels. Horizontal FDI involves investing in the same industry and stage of the value chain in a host country, while radical FDI refers to investments in completely new industries or technologies. FDI flow is a broader term referring to the amount of foreign investment moving into or out of a country. Vertical FDI refers to a kind of foreign direct investment in which a firm carries out different business operations within different stages of the value chain in a host country. It can be either backward vertical FDI, where a firm integrates aspects of the upstream operations like production of raw materials, or forward vertical FDI, where a firm integrates aspects of the downstream operations such as distribution and retail.

A Type of FDI in Which Firms Move Upstream or Downstream