Set against the initial capital inflow that comes with FDI must be the subsequent outflow of earnings from the foreign subsidiary to its parent company.Such outflows show up as capital outflow on balance-of-payments accounts.Some governments have responded to such outflows by restricting the amount of earnings that can be:
A)repatriated to a foreign subsidiary's home country.
B)reinvested in the host-market.
C)earned by the foreign subsidiaries.
D)invested in businesses concerning national security and sovereignty.

Question

Quizplus · Accepted Answer

Some governments have responded to outflow of earnings from the foreign subsidiary to its parent company which show up as capital outflows on balance-of-payment accounts by restricting the amount of earnings that can be repatriated to a foreign subsidiary's home country.

Set Against the Initial Capital Inflow That Comes with FDI