An example of forward vertical FDI is when
A)U.S.car makers built their own network of dealerships in Japan to help sell their cars.
B)U.S.car makers began to source parts in Japan to lower the cost of their cars.
C)U.S.car makers entered into joint partnerships with car makers in Japan to help sell their cars.
D)none of the options

Question

Quizplus · Accepted Answer

Forward vertical FDI is when a company invests in a foreign country in order to sell its products or services in that country. In this case, U.S. car makers built their own network of dealerships in Japan to help sell their cars, which is an example of forward vertical FDI. Option B is an example of backward vertical FDI, where a company invests in a foreign country in order to source raw materials or other inputs. Option C is an example of horizontal FDI, where a company invests in a foreign country in order to compete with local firms in the same industry.

An Example of Forward Vertical FDI Is When