Which one of these is probably the best means of reducing or offsetting political risk?
A) Refusing any foreign government assistance in building the infrastructure required for your foreign operations
B) Borrowing money in the country in which you have foreign operations to fund those activities
C) Manufacturing a complete product in a foreign country using only resources from that country
D) Paying for all foreign operations with cash originating in the home country

Question

Quizplus · Accepted Answer

Borrowing money in the country where you have foreign operations will help to establish connections with local financial institutions and provide an incentive for them to support your business. In addition, having local debt will reduce the perception of political risk, as the company has a financial obligation to the local economy. This aligns the interests of the company and the local community, making conflict less likely.

Which One of These Is Probably the Best Means of Reducing