Why Do Companies Engage in Horizontal Direct Investment?
There are several reasons why companies might pursue HDI:
Market Expansion: Companies can enter new markets and reach new customers without having to start from scratch. Economies of Scale: By replicating their successful domestic operations abroad, firms can achieve economies of scale and reduce costs. Brand Recognition: Leveraging a well-known brand can facilitate smoother entry into foreign markets. Competitive Advantage: By entering new markets, firms can preempt competitors and secure a stronger market position.