What aspect of the tertiary sector is crucial for attracting foreign direct investment?

Get ready for the Leaving Certificate Business Test. Prepare with flashcards and multiple choice questions complete with hints and explanations to help you succeed. Ace your exam now!

The aspect of the tertiary sector that is crucial for attracting foreign direct investment is robust service infrastructure. When potential investors evaluate a location for investment, they look for a solid and efficient infrastructure that can support their business activities. This includes well-developed transportation networks, reliable telecommunications, and comprehensive utilities that can facilitate operations.

A robust service infrastructure ensures that businesses can efficiently connect with customers and suppliers, reducing operational costs and increasing productivity. It also helps in the smooth functioning of services crucial to business success, such as logistics, finance, and technology support services. Consequently, nations or regions with strong service infrastructures present an appealing environment for foreign investors who seek to minimize risks and ensure the best possible conditions for their investments.

The other options do not adequately address the key aspects that investors prioritize. For example, low wages might attract some businesses but can also indicate a lack of skilled labor or lower service quality. High tax rates can deter investment as investors often seek favorable tax conditions. Lastly, poor customer service is detrimental to any business environment and would deter rather than attract potential investments. Thus, having a robust service infrastructure is significantly more influential and beneficial in attracting foreign direct investment.

Subscribe

Get the latest from Examzify

You can unsubscribe at any time. Read our privacy policy