____ is not a cost-related motive for direct foreign investment (DFI).
A) Using foreign factors of production
B) Using foreign raw materials
C) Using foreign technology
D) Reacting to trade restrictions
E) Fully benefiting from economies of scale

Question

Quizplus · Accepted Answer

Reacting to trade restrictions is not a cost-related motive for DFI. Trade restrictions may create incentives for companies to invest in foreign countries, but this is not a cost-related motive as it pertains to overcoming trade barriers rather than reducing costs. The other options, using foreign factors of production, using foreign raw materials, using foreign technology, and fully benefiting from economies of scale, all relate to cost reduction.

____ Is Not a Cost-Related Motive for Direct Foreign Investment