Foreign Direct Investment - Management Issues and Foreign Direct Investment

7 important questions on Foreign Direct Investment - Management Issues and Foreign Direct Investment

What issues influence FDI?

- Control
- Purchase or build decision
- Production Costs
- Customer knowledge
- Following clients
- Following rivals

Why is control a (seemingly) important driver of FDI?

Companies assume a majority stakehold will give them control. Governments can however impose certain rules that challenge this control.

What is rationalized production?

System of production in which each of a product's components is produced where the cost of that components is lowest.
  • Higher grades + faster learning
  • Never study anything twice
  • 100% sure, 100% understanding
Discover Study Smart

What is the Mexican Maquiladora?

A border stretch between the US and Mexico that comprises a special economic region.

Why could customer knowledge be a driver of FDI?

A local presence can help companies gain valuable knowledge about customers that could not be obtained from the home market.

Why would a company follow its client with an FDI decision?

Companies cluster within close geographic proximity because they supply each others inputs.

Why would companies follow a rival with an FDI decision?

with the 'follow the leader' principle, companies believe they might be shut out of if they don't follow the industry leader.

The question on the page originate from the summary of the following study material:

  • A unique study and practice tool
  • Never study anything twice again
  • Get the grades you hope for
  • 100% sure, 100% understanding
Remember faster, study better. Scientifically proven.
Trustpilot Logo