FDI vertical integration is backward
A)when FDI involves an industry abroad that produces inputs for MNCs.
B)when FDI involves an industry abroad that sells the MNC's outputs.
C)none of the above

Question

Quizplus · Accepted Answer

FDI vertical integration is backward when the foreign investment involves an industry abroad that produces inputs for MNCs. This means that the MNC is investing in the upstream stage of the supply chain, which is considered backward integration. In contrast, if the FDI involves an industry abroad that sells the MNC's outputs, it would be considered forward integration. However, this is not considered backward integration. Therefore, choice B is incorrect, and the answer is A.

FDI Vertical Integration Is Backward