An example of forward vertical FDI
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 above

Question

Quizplus · Accepted Answer

U.S. car makers building their own network of dealerships in Japan is an example of forward vertical FDI, because they are investing in the distribution channel in their host country, rather than just sourcing parts or partnering with local firms. This allows them to have greater control over the sales of their products in Japan.

An Example of Forward Vertical FDI