Foreign direct investment
A)Exists when two or more firms have an ownership position in a separate company.
B)Requires at least three separate companies to combine resources.
C)Exists when two or more companies agree to cooperate in any value-chain activity.
D)The above statements are all true for equity international joint ventures.

Question

Quizplus · Accepted Answer

Foreign direct investment occurs when a company or individual from one country invests in a company in another country and acquires an ownership position. This can be done through the purchase of existing shares or the creation of a new subsidiary. Therefore, choice A is the correct option. Option B is incorrect, as it implies a merger rather than foreign direct investment. Option C is incorrect, as it refers to cooperation rather than ownership. Option D is partially correct, as it refers to equity international joint ventures, but not all joint ventures necessarily involve equity.

Foreign Direct Investment