Despite Its Advantages, FDI Has Been Described as an "Expensive

question 110

Essay

Despite its advantages, FDI has been described as an "expensive" and "risky" international growth strategy. Other things being equal, why is FDI expensive and risky when compared to licensing and exporting?

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Definitions:

Omission Bias

Omission bias is the tendency to favor an act of omission (not doing something) over one of commission (doing something), often due to the fear of making a wrong choice.

Status Quo Bias

A cognitive bias where individuals prefer retaining current conditions to change or new alternatives, due to the perceived comfort or safety in familiarity.

Rationalizing Decision

The process of providing logical or rational reasons to justify a decision, often after the decision has been made.

Analyzing Options

The process of evaluating different choices or paths before making a decision.