Question

A pharmaceutical company headquartered in a country constructs a research lab in another country in order to make the best use of the efficient labor and technology available there. This is an example of:
a) direct foreign investment.
b) licensing
c) exporting
d) a joint venture
e) a strategic alliance

Answer 1

Answer: Option A

Explanation: In simple words, when a firm of one country takes controlling ownership in the business of some other foreign country then such arrangement is called foreign direct investment.

In the given case, the pharmaceutical company has their headquarter in some other country but has established their lab in some other foreign country.

Hence from the above we can conclude that the correct option is A.