When ________________,a firm will favor FDI over exporting as an entry strategy,according to the textbook.
A) interest rates or government policy make exporting unattractive
B) transportation costs or trade barriers make exporting unattractive
C) cultural barriers or trade barriers make exporting unattractive
D) cultural barriers or government policy make exporting unattractive
E) internalization theory is not applicable

Question

Quizplus · Accepted Answer

According to the textbook, when transportation costs or trade barriers make exporting unattractive, a firm will favor FDI as an entry strategy. This is because FDI allows the firm to have more control over production and distribution, thus reducing the impact of transportation costs and trade barriers.

When ________________,A Firm Will Favor FDI Over Exporting as an Entry