When It Comes to FDI, JogRight Corp

question 23

Multiple Choice

When it comes to FDI, JogRight Corp. makes greenfield investments in various foreign countries and fully manages all foreign operations on its own. This approach to FDI is risky because of the problems associated with

• A) sharing a valuable technological know-how with a potential competitor.
• B) an increase in transportation costs, especially for those products that have a low value-to-weight ratio.
• C) doing business in a different culture where the rules of the game may be very different.
• D) the possibility of an increase in trade barriers such as import tariffs or quotas.
• E) increased production costs.

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Definitions:

Bailor

An individual who entrusts their property into the care of another (the bailee).

Bailment

The legal relationship arising when one person (the bailor) gives possession of an object to another person (the bailee) under the agreement that it will be returned or otherwise disposed of according to the direction of the bailor.

Bailment Relationship

A legal relationship in which physical possession of personal property is transferred from one party to another for a specific purpose, while ownership remains with the original party.