The main disadvantage of direct investment is that the firm loses access to the market in case the government of that country insists locally purchased goods have domestic content.

Question

Quizplus · Accepted Answer

The main disadvantage of direct investment is not losing access to the market but rather the high cost and risk associated with establishing and operating a business in a foreign country, including potential issues with the host government but not limited to losing market access due to domestic content requirements.

The Main Disadvantage of Direct Investment Is That the Firm