Compare and contrast the three forms of foreign direct ...

[leo leo]

Compare and contrast the three forms of foreign direct investment.
 
  What will be an ideal response?

Question 2

The idea that each nation is efficient in the production of some goods and less efficient in the production of other goods underlies which of the following concepts?
 
  A) absolute advantage principle
  B) comparative advantage principle
  C) factor proportions theory
  D) international product cycle theory

[kaillie]

Answer to Question 1

The three methods are building new facilities or making a greenfield investment, buying existing assets or making an acquisition, and participating in a joint venture. Building new facilities allows a firm to select the best possible site and construct the best facility. However, it does require time and patience. Acquisition provides quick control and the ability to continue to generate revenues. Joint ventures are created when two or more firms agree to work together and create a jointly owned separate firm to promote their mutual interests.

Answer to Question 2

A