Direct investment requires a firm to maintain ______ ownership of its facilities, offices, and plants in a foreign country

Direct investment requires a firm to maintain ______ ownership of its facilities, offices, and plants in a foreign country

• A. 100%
• B. 50%
• C. 0%
• D. Shared

Answer: (A)

Direct investment means the firm owns and controls its foreign operations rather than just licensing or exporting. To maintain full control over its facilities, offices, and plants abroad, the firm typically holds 100% ownership—a wholly owned subsidiary. Ownership that's only 50% implies shared or joint control, which isn’t direct investment in the same sense. Zero ownership isn’t investment at all, and a shared arrangement still means partner involvement rather than complete control.

Direct investment means the firm owns and controls its foreign operations rather than just licensing or exporting. To maintain full control over its facilities, offices, and plants abroad, the firm typically holds 100% ownership—a wholly owned subsidiary. Ownership that's only 50% implies shared or joint control, which isn’t direct investment in the same sense. Zero ownership isn’t investment at all, and a shared arrangement still means partner involvement rather than complete control.