Question
Download Solution PDFIdentify a factor that doesn’t play an important role in attracting FDI.
Answer (Detailed Solution Below)
Detailed Solution
Download Solution PDFThe correct answer is - Language
Key Points
- Language
- Language plays a relatively minimal role in attracting Foreign Direct Investment (FDI) compared to other critical factors.
- Investors focus more on aspects like laws, regulations, administrative procedures, and cost of resources when evaluating FDI opportunities.
- While communication is important, most international businesses overcome language barriers by using translation services or hiring bilingual staff.
Additional Information
- Laws, Rules, and Regulations
- Countries with clear, transparent, and business-friendly regulations are more likely to attract FDI.
- Policies promoting ease of doing business encourage foreign investors to establish operations.
- Administrative Procedures
- Simplified and efficient administrative processes reduce bureaucratic delays, making countries more attractive for FDI.
- Examples include streamlined company registration, taxation systems, and permits.
- Cost of Resources
- Affordable labor, raw materials, and other resources are key factors for investors seeking cost-effective production environments.
- Countries offering competitive resource costs often receive higher FDI inflows.
Last updated on Jun 26, 2025
-> Maharashtra SET 2025 Answer Key has been released. Objections will be accepted online by 2nd July 2025.
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