If a company possesses proprietary technology and is threatened by trade restrictions like high import taxes or quotas, the company should think about FDI.
How do trade restrictions impact FDI?
Technical trade barriers (TBTs) may increase the cost of border certification, inspection, and compliance, which encourages MNEs to make foreign direct investments (FDIs) in the host market rather than exporting to that market.
What connection is there between FDI and trade?
FDI and trade are different but linked forms of transactions that play vital roles in the global economy. The global economy is driven by both international trade and foreign direct investment (FDI), which makes it possible to transfer commodities, services, and capital across national borders.
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