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

Answer 1

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

Explanation:

Buying established local companies is the most prevalent strategy since it allows Multinational Corporations (MNCs) to rapidly gain control of an existing production network and consumer base. This allows for far faster and less dangerous market expansion than establishing a new facility from the ground up, as demonstrated by Cargill Foods’ acquisition of Parakh Foods.