Exporting is often not an end in itself, but merely a step on the road

QUESTION

Exporting is often not an end in itself, but merely a step on the road toward establishment of foreign production.

Indicate whether the statement is true or false.

ANSWER

TRUE
It is important for the exporter to retain the option of local production. Once exports reach a sufficient volume to justify cost-efficient local production, the exporting firm should consider establishing production facilities in the foreign market. Such localization helps foster good relations with the foreign country and can lead to greater market acceptance. Exporting is often not an end in itself, but merely a step on the road toward establishment of foreign production