When a company ________ a foreign country,it makes a direct investment to establish a business that it solely owns and controls there.
A) creates a new, wholly-owned subsidiary in
B) enters into a licensing arrangement with
C) exports goods to
D) purchases a local firm to enter

Question

Quizplus · Accepted Answer

Creating a new, wholly-owned subsidiary in a foreign country involves direct investment, and the company would have complete ownership and control over the business. Entering into a licensing arrangement only allows the company to grant permission to a local partner to use its intellectual property, while exporting goods to a foreign country doesn't involve setting up a physical presence there. Purchasing a local firm may be a form of direct investment, but the company wouldn't necessarily have complete control over the business unless it owns all the shares.

When a Company ________ a Foreign Country,it Makes a Direct