The flow of imports that foreign direct investors often bring with them affect the host country in a variety of ways. Which of the following is a negative effect of foreign direct investment by multinational companies?

Question

Quizplus · Accepted Answer

Foreign direct investment by multinational companies can lead to a concentration of economic power in the hands of the investing country, which can weaken the host country's international trade position. The multinational company may also bring in imports that compete with local industries, leading to further economic imbalances.

The Flow of Imports That Foreign Direct Investors Often Bring