Question

Which of the following is true of domestic firms?

A. they engage in foreign direct investment
B. They actively compete and collaborate with foreign entrants
C. They are given as much importance as foreign entrants in international business
D. they invest, manage and control value added activities in other countries while operating from their home country

Answer 1

Domestic firms engage in foreign direct investment, actively compete and collaborate with foreign entrants, and invest, manage, and control value-added activities in other countries.

Step-by-step explanation:

Domestic firms typically engage in foreign direct investment, which involves purchasing a company (at least ten percent) in another country or starting up a new enterprise in a foreign country. They may also actively compete and collaborate with foreign entrants in international business. In terms of importance, domestic firms may not be given as much importance as foreign entrants, as multinational corporations often concentrate wealth in the hands of core nations. However, domestic firms do invest, manage, and control value-added activities in other countries while operating from their home country.