Direct effects of FDI arise when jobs are created in local suppliers as a result of the FDI and when jobs are created because of increased local spending by employees of the MNE. true or false?

Question

Magnolia

Business

7 November, 22:16

Direct effects of FDI arise when jobs are created in local suppliers as a result of the FDI and when jobs are created because of increased local spending by employees of the MNE. true or false?

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Eliezer Fuentes · Answer 1

The correct answer is False.

Explanation:

Foreign direct investment, in socialization is the placement of long-term capital in some part of the world, for the creation of agricultural, industrial and service companies, with the purpose of internationalizing.

There are several reasons for a company to decide to invest in another country. Almost all the arguments that have been offered for the existence of FDI can be grouped under three basic objectives: the attempt to participate in new markets, increase production efficiency through cost reductions and the attempt to exploit certain strategic assets. Next we will explain in more detail each of these three objectives.