Which of the following best describes a characteristic of vertical FDI ?

(A) behind the large increase in FDI inflows to developing countries

(B) dominated by flows between developed countries

(C) both the multinational parent and the affiliates are located in developed countries

(D) the affiliate replicates the production process elsewhere in the world

Question

Social Studies

Kyle Cannon

6 November, 23:15

Which of the following best describes a characteristic of vertical FDI ?

(A) behind the large increase in FDI inflows to developing countries

(B) dominated by flows between developed countries

(C) both the multinational parent and the affiliates are located in developed countries

(D) the affiliate replicates the production process elsewhere in the world

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Answers (1)

Know the Answer?

Tiffany Mathis · Answer 1

(D) the affiliate replicates the production process elsewhere in the world

Explanation:

Foreign direct investment (FDI) consists of a company or an individual's investment in business abroad. This can take place in two different ways, whether setting up business operations or getting business assets in the other country. This is the example of a multinational that wants to get or establish an operation that has a supplier's role or distributor's role.