Which term describes a company setting up production or distribution facilities in a country other than its home country?

• A. Direct investment
• B. Exporting
• C. Wholesalers
• D. Retailers

Answer: (A)

Setting up production or distribution facilities in another country is foreign direct investment in the form of direct investment. It means the company owns and operates facilities abroad, giving it control over production, distribution, or both, and signals a significant commitment to the foreign market.

This differs from exporting, where goods are produced at home and shipped to foreign markets—there are no foreign facilities involved. It also differs from using wholesalers or retailers, which are distribution channel partners rather than the company owning and running its own facilities overseas.