Domestication Is the Government Demand for Partial Transfer of Ownership

question 39

True/False

Domestication is the government demand for partial transfer of ownership and management responsibility from a foreign company to local entities,with or without compensation.

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Definitions:

Government Intervention

Actions taken by government to affect the economy, markets or societal issues, which can include regulations, subsidies, and taxes.

Positive Externalities

These are benefits that a transaction or activity provides to those not involved in the transaction or activity.

Negative Externalities

Costs suffered by a third party as a result of an economic transaction that they were not directly involved in.

Economies of Scale

Cost advantages reaped by companies when production becomes efficient, typically resulting from increased production where the cost per unit of output drops as scale increases.