Two political factors may also be at work in a firm’s choice to operate directly abroad through foreign direct investment (FDI). The first is to get around trade barriers such as quotas set by foreign countries. Saving tariff, the major form of trade barrier, is needless to say, an obvious motivation for undertaking FDI. Favorable investment policies practiced by host country such as tax reduction, rebated land-use fee, etc. are also an important incentive for FDI.