Which of the following is one of the limitations of exporting that leads companies to prefer FDI over exporting?
A)presence or threat of trade barriers
B)costs of acquiring a foreign enterprise
C)costs of establishing production facilities in a foreign country
D)risk of giving away valuable technological know-how to a potential foreign competitor
E)possibility of diminishing returns

Question

Quizplus · Accepted Answer

The presence or threat of trade barriers can make exporting difficult and costly, leading companies to prefer FDI as a way to access foreign markets more easily. The other options may also be factors, but this is the most direct answer to the question.

Which of the Following Is One of the Limitations of Exporting