The only profitable way for foreign firms to enter trade-restricted markets is through FDI rather than through exports.

Question

Quizplus · Accepted Answer

Foreign Direct Investment (FDI) involves investing in a foreign country by setting up operations like subsidiaries, joint ventures, or acquiring local companies. In trade-restricted markets, strict regulations limit or ban foreign imports and exports, making it difficult to penetrate such markets through exports. In contrast, FDI provides companies with the opportunity to establish a local presence and access the market while complying with local regulations. Therefore, FDI is a more viable option for foreign firms in trade-restricted markets to enter and profit from the market.

The Only Profitable Way for Foreign Firms to Enter Trade-Restricted