Question

If a firm engages in final assembly in its home operations, then which of the following operations of the firm in a foreign country would be considered a downstream vertical FDI? a. Final assembly b. Components procurement c. Research and development d. Marketing

Answer 1

Answer:

D) Marketing

Explanation:

Vertical foreign direct investment (FDI) refers to companies moving upstream (R&D and manufacturing process) or downstream (distribution and selling process) in different value chain stages in a host country.

In this case, downstream vertical FDI includes marketing activities done at the host country. Upstream vertical FDI would include the purchase of component parts in the host country.