To mitigate costs and risks of information transfer across borders, what do most multinational firms prefer to do?

The preference of multinational firms to develop separate systems for each country is driven by the need to comply with local regulations and standards governing data privacy, security, and transfer. Each country may have its unique legal frameworks that dictate how data must be handled, stored, and transmitted. By creating tailored systems for each market, firms can ensure compliance with these diverse requirements, minimizing legal risks and potential penalties associated with breaches.

Maintaining a master database at head offices may not effectively address the varying regulations across jurisdictions, potentially leading to violations of local laws. Similarly, developing a master system that meets all involved countries' standards can be overly complex and costly, as it requires extensive customization and may still fall short in addressing specific local regulations. The use of microwave satellite transmission is an outdated method and does not directly relate to mitigating risks and costs involved in cross-border data transfer. Therefore, the approach of developing separate systems allows for greater flexibility and control in line with local requirements, ultimately serving the interests of multinational firms more effectively.