Considering the fact that many barriers to international portfolio investments have been dismantled in recent years,
A)capital market imperfections as a motivating factor for FDI are likely to become more important going forward.
B)capital market imperfections as a motivating factor for FDI are likely to become less relevant.
C)labor market imperfections as a motivating factor for FDI are likely to become less relevant.
D)none of the options

Question

Quizplus · Accepted Answer

With barriers to international portfolio investments being dismantled, it becomes easier for investors to invest in foreign stocks and securities. This reduces the need for FDI as a means of diversifying their portfolios and accessing foreign markets. Hence, capital market imperfections are likely to become less relevant as a motivating factor for FDI.

Considering the Fact That Many Barriers to International Portfolio Investments