A fast-growing form of foreign direct investment is sovereign wealth funds (SWFs). Why do these investments by governments with surplus cash flows worry trade experts?
A)SWFs invest in high risk start-ups with no proven history of producing goods and services that developing or developed countries need. They may likely undermine the years of development of growing economies.
B)SWFs have a greater risk of going bankrupt than other investments because governments are not good at running businesses.
C)Some fear that governments investing their SWFs in large firms may gain control of natural resources, sensitive technologies, and the decision making of management.
D)Some trading experts believe that SWFs are supported by terrorist organizations, and their strategy is an indirect way to undermine the

Question

Quizplus · Accepted Answer

Some trade experts worry that SWFs may gain control of strategic assets such as natural resources or sensitive technologies, which could potentially undermine national security interests. Additionally, there are concerns that these investments may influence the decision-making of management in the invested firms.

A Fast-Growing Form of Foreign Direct Investment Is Sovereign Wealth