Question

The ________ theory states that when an aspect of the market makes a transaction (e.g. exporting a product or service) less efficient than it could be, a company will undertake foreign direct investment to internalize the transaction.

Answer 1

It is the theory of Market Imperfections

Step-by-step explanation:

Market imperfections theory is said to be when a trade theory is brought about from international markets where perfect competition does not exist. It occurs when at least, one of the assumptions for perfect competition is violated and this results to what we call an imperfect market.