In international finance, the spending by a domestic firm to establish foreign operating units is called:

Question

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Direct foreign investment is the spending by a domestic firm to establish foreign operating units, which involves investing in foreign countries to establish new facilities or expanding existing ones. This investment can involve different forms such as acquiring existing firms or starting new ones, and it means a long-term commitment to foreign operations. Domestic investment (choice B) refers to spending by domestic firms in their home country, while capital flight (choice A) refers to the movement of capital from a country due to political or economic instability, and offshoring (choice C) involves relocating business activities to a foreign country to take advantage of lower costs of production.

In International Finance, the Spending by a Domestic Firm to Establish