Which of the following characteristics distinguishes foreign direct investment from other forms of investment?(1 point)

Question

Responses

Foreign direct investment involves domestic ownership of foreign assets.
Foreign direct investment involves domestic ownership of foreign assets.

Foreign direct investment involves the transfer of domestic capital to foreign countries.
Foreign direct investment involves the transfer of domestic capital to foreign countries.

Foreign direct investment involves the exchange of foreign assets for domestic assets.
Foreign direct investment involves the exchange of foreign assets for domestic assets.

Foreign direct investment involves significant control in a foreign business.

Answer 1

The characteristic that distinguishes foreign direct investment (FDI) from other forms of investment is:

Foreign direct investment involves significant control in a foreign business.

This means that the investor not only provides capital but also has a substantial degree of influence and decision-making power over the foreign enterprise, typically through ownership of a certain percentage of the company.