_____ are controls over the behavior of the MNE's local subsidiary.
A)Performance requirements
B)Ownership restraints
C)Double taxation laws
D)Greenfield restrictions

Question

Quizplus · Accepted Answer

Performance requirements are conditions that local governments may impose on foreign subsidiaries of MNEs in order to ensure that they engage in certain behaviors or obtain certain outcomes. These requirements typically relate to the local content of goods and services, technology transfers, employment and training of locals, and environmental standards. They are intended to ensure that MNEs contribute to the development of the local economy and society in which they are operating. Thus, performance requirements are controls over the behavior of the MNE's local subsidiary. The other options - ownership restraints, double taxation laws, and greenfield restrictions - do not directly relate to controlling the behavior of the MNE's subsidiary.

_____ Are Controls Over the Behavior of the MNE's Local