Advantages and disadvantages of foreign direct investment, Financial Management

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What are the disadvantages and advantages of Foreign direct investment (FDI) like opposed to a licensing agreement with a foreign partner?

Answer:  The major advantage of FDI (Foreign direct investment) over licensing agreement along with a foreign partner is that it offers protection against possible interlopers. The major disadvantage of FDI is that it is costly and time consuming to establish foreign presence in this way and FDI is possibly more vulnerable to political risk.


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