Asked by monica fargas on Jun 17, 2024
Verified
Cross-border flows of corporate investments such as purchasing or establishing foreign subsidiaries and joint ventures is called:
A) International trade
B) Foreign direct investment
C) International investment
D) Indirect foreign investment
Cross-Border Flows
The movement of goods, capital, services, people, and data across international borders.
Foreign Direct Investment
Funds deployed by an individual or company from one nation into the business ventures of another country, through the initiation of business activities or the acquisition of business properties.
Subsidiaries
Companies that are owned or controlled by another larger parent company, often operating independently but reporting to the parent corporation.
- Pinpoint the strengths and drawbacks of foreign direct investment and international investment.
Verified Answer
GH
Gabriela HolmesJun 21, 2024
Final Answer :
B
Explanation :
Cross-border flows of corporate investments such as purchasing or establishing foreign subsidiaries and joint ventures is referred to as Foreign Direct Investment (FDI). Option A, international trade, refers to the exchange of goods and services between countries. Option C, international investment, is a broader term that encompasses FDI as well as portfolio investments made by individuals or institutions in foreign stocks or bonds. Option D, indirect foreign investment, is not a commonly used term and does not accurately describe the concept of cross-border corporate investments.
Learning Objectives
- Pinpoint the strengths and drawbacks of foreign direct investment and international investment.