Which of the following best exemplifies foreign direct investment (FDI)?
A) Pure Pearls, a jewelry store in the U.S., imports harvested pearls from Indonesia, Philippines, and Australia.
B) Chivalry, a U.S. based phone manufacturing company, has set up its own assembly plant in Japan to cater to the needs of the Asian market.
C) Delicate Love, a reputed florist company in Holland, exports tulips and roses throughout the globe.
D) Samantha started an Italian restaurant in her home country, the United States, after she took cooking lessons from a reputed chef in Italy.
E) Yin and Yang Inc., a Chinese firm, supplies buttons and zips to major denim brands in the UK.

Question

Quizplus · Accepted Answer

Foreign direct investment (FDI) involves a company investing in and operating a business in a foreign country. Option B exemplifies FDI as the U.S. based phone manufacturing company has set up its own assembly plant in Japan to cater to the needs of the Asian market. The other options involve international trade either through imports or exports or involve a person starting a restaurant in their home country after gaining expertise from another country - these do not qualify as FDI.

Which of the Following Best Exemplifies Foreign Direct Investment (FDI)