Investments into industry that provides inputs into a firm’s domestic production is known as:Question 2Select one:a.Forward vertical direct investmentb.Greenfield direct investmentc.Backward vertical direct investmentd.Horizontal direct investment
Question
Investments into industry that provides inputs into a firm’s domestic production is known as:Question 2Select one:a.Forward vertical direct investmentb.Greenfield direct investmentc.Backward vertical direct investmentd.Horizontal direct investment
Solution
The answer is c. Backward vertical direct investment. This type of investment occurs when a firm invests in an industry that supplies inputs to its domestic production process. This could be in the form of acquiring a supplier or setting up operations to produce its own inputs.
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