To reduce the exposure to a host government takeover, an MNC may attempt to recover cash flows from the foreign project more quickly or hire local labor.

Question

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By recovering cash flows more quickly from a foreign project, the MNC can minimize the amount of assets that can be seized by the host government in case of a takeover. Hiring local labor can also reduce the risk of a takeover as it demonstrates a commitment to the local community and may increase the likelihood of support from the host government.

To Reduce the Exposure to a Host Government Takeover, an MNC