When one firm enters a foreign country through FDI, its rivals are likely to follow by undertaking additional FDI in a host country to:

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When a firm enters a foreign country through FDI and gains location advantages, its rivals are likely to follow suit and undertake additional FDI to acquire similar location advantages or neutralize the first mover's advantages. This is done to remain competitive in the host country market. Options A and B are not specific to the entry of rivals through FDI, while option C is not a commonly cited motivation for FDI by rival firms. When a firm enters a foreign country through FDI, it gains location advantages such as lower costs of production, access to raw materials, and favorable policies from the host government. Rivals are likely to follow suit and undertake additional FDI to acquire similar location advantages or to neutralize the first mover's location advantages. This leads to increased competition and further development of the host country's economy.

When One Firm Enters a Foreign Country Through FDI, Its