Firms with operations and assets across the globe, true MNEs, are in many ways as international in composition as the most internationally diversified portfolio of unrelated securities. Why do investors not simply invest in MNEs traded on their local exchanges, and forego the complexity of purchasing securities traded on foreign exchanges?
Answer to relevant QuestionsWhen you are constructing your portfolio, you know you want to include Cementos de Mexico (Mexico), but you cannot decide whether you wish to hold it in the form of ADRs traded on the NYSE, or directly through purchases on ...Define in words (without graphics) how the optimal domestic portfolio is constructed. What are the advantages and disadvantages of forming a joint venture to serve a foreign market compared to serving that market with a wholly owned production subsidiary? What is the essence of the theory of comparative advantage? A strongly competitive home market can sharpen a firm’s competitive advantage relative to firms located in less competitive markets. Explain what is meant by the “competitive advantage of nations.”
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