What Is The Most Common Route For Investments By MNCs In Countries Around The World?
(a) Set Up New Factories
(b) Buy Existing Local Companies
(c) Set Up Production Jointly
(d) None Of These
Correct answer is option (b). The most common route for MNC investments is to buy up local companies and then to expand production. MNCs with huge money often do so. For example: A big food company in America (Cargill Foods) buys a smaller company in India (Parakh Foods).
Second best method is Setting up Production jointly (or a joint venture) with some local companies in some other country. Setting up New Factories is altogether an expensive prospect and is usually not followed by MNCs.
Second best method is Setting up Production jointly (or a joint venture) with some local companies in some other country. Setting up New Factories is altogether an expensive prospect and is usually not followed by MNCs.