The core competency that explains FDI activity is:
A)the free flow of financial resources across national borders.
B)the ability of MNCs to make skilled investments in foreign real and financial assets.
C)the ability of MNCs to evaluate political and currency risks.
D)the willingness of investors to take chances on risky investments.

Question

Quizplus · Accepted Answer

Core competency refers to the unique capabilities and resources that a company possesses, which allow it to achieve a competitive advantage over its rivals. In the case of FDI activity, the core competency is the ability of multinational corporations (MNCs) to invest in foreign real and financial assets in a skilled and effective way, leveraging their expertise and resources to generate higher returns than domestic competitors. This ability includes the capacity to evaluate political and currency risks, as well as to adapt to local market conditions and regulations. The free flow of financial resources and the willingness to take risks are important factors, but they are not the core competency that explains FDI activity.

The Core Competency That Explains FDI Activity Is