Which of the following is NOT a reason for a firm to engage in horizontal FDI?

Question

Quizplus · Accepted Answer

Horizontal Foreign Direct Investment (FDI) involves a business expanding into a foreign market to produce the same products or services it offers in its home country. The primary motivations for such expansion include market expansion (A), tariff avoidance in the foreign markets where the investment is made (B), and potentially reducing corporate taxes (D) by taking advantage of lower tax rates in the host country. Avoiding tariffs in the home market (C) is not a direct reason for engaging in horizontal FDI, as this form of investment focuses on serving the market of the foreign country rather than importing goods back to the home country to avoid home market tariffs.

Which of the Following Is NOT a Reason for a Firm