Many firms choose direct investment in assets in foreign countries (e.g., establishing new subsidiaries, making acquisitions, or building joint ventures) over direct investment because it provides better protection for their assets.

Question

Quizplus · Accepted Answer

Direct investment in assets in foreign countries provides better protection for assets because the firm has more control and ownership over their assets, compared to direct investment where the firm may only have partial ownership or control. Additionally, direct investment in assets allows for the firm to customize and adjust their operations in the foreign country more easily, compared to direct investment where the firm may be limited by the policies and regulations of the foreign country.

Many Firms Choose Direct Investment in Assets in Foreign Countries