How can an MNE overcome its inherent disadvantages?
A)By borrowing funds from the host country rather than transferring funds from the parent firm
B)By producing more than two products in which it has comparative advantage
C)By expanding its operation in more than two host countries
D)By owning one or more assets that are not owned by its local competitors in the host country

Question

Quizplus · Accepted Answer

Owning one or more assets that are not owned by its local competitors in the host country can give the MNE a unique advantage and differentiate it from local competitors. This could include proprietary technology, intellectual property, or specialized equipment, which can provide a competitive edge and help the MNE overcome inherent disadvantages. The other choices, such as borrowing funds or expanding operations, may be useful strategies but do not directly address the inherent disadvantages of being a foreign firm in a local market. Producing more than two products has nothing to do with overcoming the inherent disadvantages of an MNE.

How Can an MNE Overcome Its Inherent Disadvantages