Creation of a foreign subsidiary eliminates the risk to a domestic parent firm.

Question

Quizplus · Accepted Answer

Creation of a foreign subsidiary may pose considerable risk to the domestic parent firm by subjecting it to foreign laws and the jurisdiction of foreign courts. In many instances, however, the only legal or political means a firm has to invest directly in a foreign country is to engage in a joint venture with an entity from that host country.

Creation of a Foreign Subsidiary Eliminates the Risk to a Domestic