When Contemplating FDI, Why Do Firms Apparently Prefer to Acquire

question 102

Multiple Choice

When contemplating FDI, why do firms apparently prefer to acquire existing assets rather than undertake greenfield investments?

• A) Greenfield investments are characterized by reduced management control.
• B) Mergers and acquisitions are preferred because most greenfield investments fail.
• C) It is easier and less risky for a firm to build strategic assets than acquire similar assets.
• D) Mergers and acquisitions are quicker to execute than greenfield investments.

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Definitions:

Flooding

A behavioral therapy technique intended to treat anxiety by exposing patients to their fear-inducing stimuli in a controlled environment.

Fear-evoking Stimuli

Environmental or internal triggers that provoke a fear response, activating the body’s fight or flight reaction.

Behavior Therapy

A type of psychotherapy that focuses on changing undesirable behaviors through systematic exposure and other techniques.

Observational Learning

Acquiring knowledge by watching others' actions and the results of those actions.