Historically, firms engaged in FDI have generally preferred wholly owned subsidiaries.

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Historically, firms engaged in FDI have preferred wholly owned subsidiaries because they offer maximum control and allow the parent company to transfer technology, knowledge and skills to its foreign operations, and also to avoid potential conflicts with local partners. However, in recent years, joint ventures and strategic alliances have become more popular as they can provide access to local knowledge and expertise, sharing of risk and costs, and government incentives.

Historically, Firms Engaged in FDI Have Generally Preferred Wholly Owned