One reason a home country may discourage foreign direct investment outflows is to protect its "sunset" industries.

Question

Quizplus · Accepted Answer

A home country may actually encourage its firms to invest abroad to expand and remain globally competitive. Discouraging foreign direct investment outflows would limit the potential benefits (such as increased competitiveness and access to new markets) that can come from such investments. However, a home country may discourage foreign direct investment inflows if it believes its domestic industries are at risk of being overtaken by foreign competitors.

One Reason a Home Country May Discourage Foreign Direct Investment