When a firm invests directly in new facilities to produce and/or market a product in a foreign country, _____________ occurs.
A)reciprocal foreign investment
B)cross-boarder international investment
C)international capital investment
D)international expansion
E)foreign direct investment

Question

Quizplus · Accepted Answer

Foreign direct investment (FDI) refers to a firm investing directly in new facilities to produce and/or market a product in a foreign country. FDI is different from other types of international investment, such as portfolio investment, where investors invest in a foreign firm without taking direct control of the operations. FDI allows the firm to have more control over its operations in the foreign market and can lead to greater profits and market share.

When a Firm Invests Directly in New Facilities to Produce