A firm will favor foreign direct investment over exporting as an entry strategy when transportation costs or trade barriers make exporting unattractive.

Question

Quizplus · Accepted Answer

This statement is true. When transportation costs or trade barriers make exporting unattractive, a firm may prefer to invest directly in a foreign market to avoid those costs and barriers. This can also provide the firm with greater control over the distribution and marketing of their products in the foreign market.

A Firm Will Favor Foreign Direct Investment Over Exporting as an Entry