________ suggest(s) that FDI will be more likely to occur when transaction costs with a second firm are high.

Question

Quizplus · Accepted Answer

This is a key premise of internalization theory, which argues that firms will choose to invest in foreign countries to avoid high transaction costs associated with trading with a second firm. By internalizing activities in the foreign market, firms can reduce these costs and potentially increase their profits.

________ Suggest(s) That FDI Will Be More Likely to Occur