Offshore extractive investments in petroleum and mineral is the example of
A) forward vertical integration.
B) backward vertical FDI.
C) horizontal FDI.
D) none of the above.

Question

Quizplus · Accepted Answer

Offshore extractive investments involve investing in the production and extraction of petroleum or minerals from foreign countries. This type of investment is considered backward vertical FDI because the foreign country is supplying raw materials to the investing firm's home country. Vertical FDI involves investing in a different stage of the value chain, either forward or backward. Horizontal FDI involves investing in the same stage of the value chain, but in a different market. Therefore, the best choice is B, backward vertical FDI.

Offshore Extractive Investments in Petroleum and Mineral Is the Example