Which of the following is true of foreign direct investment?
A)The contributions of entrepreneurs and small businesses to foreign direct investment is insignificant.
B)Globalization has led emerging markets to undertake less foreign direct investment and industrialized nations to undertake more foreign direct investment.
C)The desire to increase a firm's global competitiveness drives many cross-border mergers and acquisitions.
D)Foreign direct investment does not involve obtaining a degree of control in a company.

Question

Quizplus · Accepted Answer

The desire to increase a firm's global competitiveness is a major driver of foreign direct investment, and this can often take the form of cross-border mergers and acquisitions. Option A is incorrect because small businesses and entrepreneurs can play a significant role in foreign direct investment, particularly in emerging markets. Option B is also incorrect because emerging markets are actually seeing an increase in foreign direct investment, while industrialized nations may be undertaking less due to saturation in their own markets. Option D is incorrect because foreign direct investment typically involves obtaining a degree of control in a company, either through acquiring a controlling stake or establishing a wholly-owned subsidiary.

Which of the Following Is True of Foreign Direct Investment