A company is said to be a direct foreign investor in another country if it:
a. outsources a part of its production to the country due to the availability of cheaper labor.
b. exports finished products to that country.
c. manufactures products for that country based on contract manufacturing.
d. acquires an active ownership of marketing facilities in that country.
ANSWER: d
Active ownership of a foreign company or of overseas manufacturing or marketing facilities is called direct foreign investment. Direct investors have either a controlling interest or a large minority interest in the firm.
You might also like to view...
Selecting an outside supplier is always done with a formal "request for proposal."
Indicate whether the statement is true or false
Heineken has used FDI extensively as part of its internationalization strategy because of the cost of transporting its products
Indicate whether the statement is true or false