Which of the following are possible negative impacts of FDI on domestic firms in host countries? I.…

While Foreign Direct Investment (FDI) brings capital and know-how, its potential negative impacts on a host economy include the creation of market monopoly by crowding out small domestic producers (I), long-term technological dependence on foreign parent corporations (II), and balance-of-payments strain from repatriation of profits and royalties (IV). Increased competition (III) generally enhances market efficiency.