Question

Foreign direct investment is the best strategy when: A.high trade barriers exist B.there is no need...

Foreign direct investment is the best strategy when:

A.high trade barriers exist

B.there is no need to protect technological know-how

C.transportation costs are low

D.corruption is rampant in the foreign country

E.there is a lot of anti-American sentiment in the foreign country

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Homework Answers

Answer #1

Foreign direct investment means companies purchase capital and invest in a foreign country called Foreign direct investment.for instance U S invest money in India's pharmaceutical production and investigating new medicines or develop new medical technologies.

The main factors affecting FDI

Transportation and communication is most important factors determine the FDI.The transportation and communication charge is high the FDI will reduce.

Size of local market

Wage rate exist

Infrastructure of the country

Political stability

Access to free trade are and so on

So here the Answer is Transportation cost are low.

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