An important motive for direct foreign investment is to

Question

Quizplus · Accepted Answer

Direct foreign investment allows firms to penetrate new markets with economies growing faster than the home country. This can help the firm to increase profits and expand its customer base. Other motives for direct foreign investment may include diversification of political risks, access to resources, and access to lower financing costs. However, insulating the firm from fluctuations in the value of the dollar and increasing NPV by using lower foreign discount rates are not primary motives for direct foreign investment.

An Important Motive for Direct Foreign Investment Is to