A company is said to be a direct foreign investor in another country if it:
A)outsources a part of its production to the country due to the availability of cheaper labor.
B)exports finished products to that country.
C)manufactures products for that country based on contract manufacturing.
D)acquires an active ownership of marketing facilities in that country.

Question

Quizplus · Accepted Answer

Direct foreign investment occurs when a company establishes an active ownership presence in a foreign country, such as through a subsidiary or joint venture. Option A refers to outsourcing, not direct investment. Option B refers to exporting, not direct investment. Option C refers to contract manufacturing, which may or may not involve direct foreign investment depending on the ownership structure of the manufacturing facility.

A Company Is Said to Be a Direct Foreign Investor