A U.S.-based computer manufacturer decided to acquire a supplier of computer parts (like motherboards and keyboards) in China. This is an example of _________.
A) greenfield investment
B) brownfield investment
C) vertical FDI
D) horizontal FDI

Question

Quizplus · Accepted Answer

The acquisition of a supplier of computer parts in China is an example of vertical FDI, as it involves the integration of two companies in different stages of the production process. The U.S.-based computer manufacturer is integrating with a supplier of computer parts in China, which is a different part of the production chain.

A US-Based Computer Manufacturer Decided to Acquire a Supplier of Computer