By placing tariffs on imported goods, governments can increase the cost of exporting relative to foreign direct investment and licensing
Indicate whether the statement is true or false.
TRUE
Transportation costs aside, some firms undertake foreign direct investment as a response to actual or threatened trade barriers such as import tariffs or quotas. By placing tariffs on imported goods, governments can increase the cost of exporting relative to foreign direct investment and licensing. Similarly, by limiting imports through quotas, governments increase the attractiveness of FDI and licensing.
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