Historically, foreign direct investment has followed foreign trade, and one reason is that foreign trade is typically less costly and less risky than making a direct investment into foreign markets.

Question

Quizplus · Accepted Answer

This statement is true. Companies may initially engage in foreign trade to test the waters of a foreign market before making a larger commitment through direct investment. Foreign trade allows companies to gain experience and establish relationships with potential partners in the foreign market before investing significant amounts of capital.

Historically, Foreign Direct Investment Has Followed Foreign Trade, and One