What describes an agreement where two or more firms share ownership and control of an investment in a foreign country?

• A. Joint Venture
• B. Foreign Direct Investment
• C. Offshoring
• D. Management Contract

Answer: (A)

Two or more firms sharing ownership and control of an investment in a foreign country describes a joint venture. In a joint venture, the partners pool resources, contribute capital, and cooperate to run a combined business project abroad, with profits, losses, and governance shared according to an agreed arrangement. This setup lets partners bring complementary strengths—such as local market knowledge, technology, or distribution networks—while spreading risk.

This differs from foreign direct investment in general, which is the broader act of owning assets or a subsidiary in another country, not necessarily with another party in a shared venture. Offshoring refers to relocating production or services to another country without creating a jointly owned entity. A management contract involves one firm managing another's foreign operations without shared ownership.