Firms engage in foreign direct investment (FDI) for a number of reasons. How may these reasons for FDI be classified?
A) Market related
B) Trade related
C) Cost related
D) All of the above
E) (a) and (c) only

Question

Quizplus · Accepted Answer

Firms engage in FDI for a variety of reasons that can be classified into market-related reasons (such as accessing new markets or catering to local tastes), trade-related reasons (such as avoiding trade barriers), and cost-related reasons (such as accessing lower-cost inputs or labor). Therefore, all of the above choices are valid reasons for FDI.

Firms Engage in Foreign Direct Investment (FDI) for a Number