A Firm Will Favor FDI Over Exporting as an Entry

question 18

Multiple Choice

A firm will favor FDI over exporting as an entry strategy when

• A) the costs of establishing production facilities are high.
• B) the transportation costs or trade barriers are high.
• C) there are problems associated with doing business in a different culture.
• D) the products involved have a high value-to-weight ratio.
• E) the firm wants to occupy a position that falls inside the efficiency frontier.

---

Definitions:

Traditional Sources

Established means of obtaining information or resources, often based on long-standing customs or practices.

Idea Generation

Idea generation is the creative process of generating new ideas through techniques like brainstorming, aiming to solve problems or identify opportunities for innovation.

New-product Development Process

A series of stages involved in designing, developing, testing, and launching a new product in the market.

Pool of Concepts

A collection or repository of ideas, terms, or notions that can be drawn from in discussions or creative processes.