When companies realized they could produce in the most efficient and productive locations in the world and simply export to markets worldwide,a new surge of foreign direct investment flowed into ________.
A)newly industrialized nations and emerging markets
B)highly developed economies
C)home country markets
D)totalitarian and theocratic nations only

Question

Quizplus · Accepted Answer

Exporting from efficient and productive locations to markets worldwide is a common strategy among multinational companies. This results in a surge of foreign direct investment in emerging markets and newly industrialized nations. These regions usually have lower labor costs and a rapidly growing consumer market, making them attractive investment destinations for multinational companies. Highly developed economies already have a strong industrial base and high labor costs, which makes exporting less attractive. Home country markets are usually already saturated, so companies must seek other markets to grow their business. Totalitarian and theocratic nations may not be attractive investment destinations due to political and economic instability.

When Companies Realized They Could Produce in the Most Efficient