A firm is most likely to favor foreign direct investment over exporting when
A) the firm wants its technological know-how to be widely disseminated.
B) the firm wishes to maintain control over its operations and business strategy.
C) the transportation costs are low.
D) there are no trade barriers.
E) the firm wants to customize its products as per the tastes and preferences of foreign consumers.

Question

Quizplus · Accepted Answer

Foreign direct investment allows a firm to maintain control over its operations and business strategy in the foreign market, which is not possible with exporting.

A Firm Is Most Likely to Favor Foreign Direct Investment