A Korean television manufacturer recently invested in a new television tube plant in Mexico. This form of international business is aptly named international licensing.

Question

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In this case, the Korean television manufacturer is engaged in direct foreign investment. In this type of investment, companies may invest locally to capitalize on low-cost labor, to avoid high import taxes, to reduce the high costs of transportation to market, to gain access to raw materials and technology, or as a means of gaining market entry.

A Korean Television Manufacturer Recently Invested in a New Television