When a firm in an industrial nation purchases a firm in a
Lowerincome nation, economists call it:

Question

When a firm in an industrial nation purchases a firm in a
Lower­income nation, economists call it:

Quizplus · Accepted Answer

When a firm in an industrial nation purchases a firm in a lower-income nation, it is considered vertical FDI because it involves the integration of different stages of the production process across different countries. This type of FDI occurs when a firm moves its production processes to another country to take advantage of lower labor costs, access raw materials, or gain from other location-specific advantages.

When a Firm in an Industrial Nation Purchases a Firm