In arranging international finance for new operations, issuing equity (shares) locally makes new subsidiaries vulnerable to national shareholders and the fortunes of the local economy

Question

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Issuing equity locally ties a subsidiary's financial performance and decision-making to local shareholders, who may have interests aligned with the local economy's fortunes, making the subsidiary vulnerable to economic fluctuations and local investor demands.

In Arranging International Finance for New Operations, Issuing Equity (Shares)