In determining the factors that affect FDI, it is useful to distinguish between two types of FDI: market-seeking and non-market seeking. The main objective of market-seeking FDI is to serve domestic markets. Here goods are produced in the host country and sold in the local market. As a consequence, this type of FDI is driven by domestic demand such as large markets and high income in the host country-suggesting that FDI in small and poor countries is less likely to be market seeking. For non-market seeking FDI, goods are produced in the host country but sold abroad.