Question Description
I'm working on a management question and need an explanation and answer to help me learn.
why do companies go to the trouble of establishing operations abroad through foreign direct investment when two alternatives, exporting and licensing, are available to them for exploiting the profit opportunities in a foreign market? or why do so many companies prefer FDI over either exporting or licensing?
Explanation & Answer
View attached explanation and answer. Let me know if you have any questions.
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Foreign Direct Investment
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Why Many Companies Prefer FDI over either Exporting or Licensing
Foreign Direct Investments is a situation where a person or a firm acquires a minimum of
ten percent ownership of an overseas company (ResearchFDI, 2021). People buy shares from
other companies in other nations as a form of investment. Most multinationals focus on foreign
direct investments over exporting the...