Question

risk unique to firms with direct investment in a foreign country is the potential takeover of the firm's assets by the government of that country. This takeover is called a(n)

Answer 1

This takeover is called an expropriation.

What is expropriation?

• Expropriation is the governmental seizure of property or the modification of existing private property rights, usually for the benefit of the public.
• The potential takeover of a firm's assets by the government of a foreign country is a risk peculiar to enterprises having direct involvement in that country.

What are the firm's assets?

• A company's assets are reflected on its balance sheet.
• They are purchased or created in order to raise the worth of a company or to boost its operations.
• An asset is anything that can generate cash flow, lower expenses, or increase sales, whether it's manufacturing equipment or a patent.

As the definition says, the potential takeover of a firm's assets by the government of a foreign country is a risk peculiar to enterprises having direct involvement in that country.

Therefore, this takeover is called a(n) expropriation.

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