If an MNC attempts to build a subsidiary in a country that will take business away from local firms that are protected by the host government, the host government might do all of the following except:

Question

Quizplus · Accepted Answer

If an MNC attempts to take business away from local firms, the host government may try to protect its local industries by imposing additional taxes, requiring the use of local employees for managerial positions, or even giving subsidies to the MNC's competitors. However, it is unlikely that the host government would subsidize the MNC, as this would be counterproductive to its objective of protecting local industries.

If an MNC Attempts to Build a Subsidiary in a Country