Asked by Abigail Ferguson on May 27, 2024
Verified
Matata, a Japanese firm that manufactures automobile parts, was running at a loss in its offshore outlet in Mexico due to the governmental and civil disruptions in the country. Thus, it withdrew its business outlets from Mexico. At this opportunity, another Japanese firm, Lui Corporation, entered into business in Mexico. With this decision, Lui Corporation has made itself liable to ___.
A) a licensing agreement
B) a regional economic alliance
C) political risk
D) insourcing
E) joint venture
Political Risk
The risk of losses due to changes in a country's political landscape or government policies that can affect investments or operations.
Licensing Agreement
A legal contract allowing one party to use another party's property or intellectual property under specified conditions.
Regional Economic Alliance
An agreement among countries in a specific geographic area to reduce trade barriers and increase economic cooperation.
- Gain insight into how political disturbances can imperil international investments and the critical role of political risk evaluation.
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Learning Objectives
- Gain insight into how political disturbances can imperil international investments and the critical role of political risk evaluation.
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