Question

The most common route for investments by MNCs in countries around the world is to ______.

Options

• set up new factories

• buy existing local companies

• form partnerships with local companies

• none of these

Answer 1

The most common route for investments by MNCs in countries around the world is to buy existing local companies.

Explanation:

MNCs with a considerable capital base prefer to take over local companies and then expand production. This allows them to quickly establish a strong presence and leverage the local company’s resources and market knowledge. For example, Coca-Cola took over Thums Up in India.