FDI is risky because of the problems associated with:
A)sharing a valuable technological know-how with a potential competitor.
B)an increase in transportation costs, especially for those products that have a low value-to-weight ratio.
C)doing business in a different culture where the rules of the game may be very different.
D)the possibility of an increase in trade barriers such as import tariffs or quotas.
E)increased production costs.

Question

Quizplus · Accepted Answer

FDI is risky because of the problems associated with doing business in a different culture where the rules of the game may be very different. Relative to indigenous firms, there is a greater probability that a foreign firm undertaking FDI in a country for the first time will make costly mistakes due to its ignorance.

FDI Is Risky Because of the Problems Associated With