Choice between direct exporting and FDI Das Spielzeug is a profit-maximizing firm producing puzzles, which it can produce and sell in its home country, Germany, and abroad in Russia. The average cost of producing and selling puzzles in Germany is $5 per unit, while the average cost of producing and selling puzzles in Russia is $8 per unit. The firm can either choose to directly export puzzles to Russia or set up a foreign subsidiary there. What would be the best choice for Das Spielzeug regarding the export strategy?

a. Direct exporting
b. Foreign Direct Investment (FDI)
c. Joint venture
d. Licensing agreement