Foreign direct investment involves which of the following?

Foreign direct investment (FDI) refers to the process by which an individual or entity from one country makes an investment in business interests located in another country. This typically involves acquiring a significant degree of control over the foreign business, which is often achieved through the purchase of permanent capital goods. These capital goods can include factories, machinery, assets, and other long-term investments aimed at producing goods or services in the foreign market.

By contrast, purchasing stocks in foreign companies represents a portfolio investment, where control is not generally established, as it usually involves buying shares without any substantial influence over the company's operations. Establishing trade agreements relates more to the frameworks governing trade between countries and is not inherently about investment. Conducting market research, while essential for understanding potential investment opportunities and making informed decisions, does not constitute investment itself. Thus, buying permanent capital goods is the definitive characteristic of foreign direct investment, making it the correct choice.