________ seeks to explain why firms often prefer foreign direct investment over licensing as a strategy for entering foreign markets. Select one: a. The noninterventionist theory b. Internalization theory c. The product life-cycle theory d. Knickerbocker's theory
Question
________ seeks to explain why firms often prefer foreign direct investment over licensing as a strategy for entering foreign markets.
Select one:
a. The noninterventionist theory
b. Internalization theory
c. The product life-cycle theory
d. Knickerbocker's theory
Solution
The correct answer is:
b. Internalization theory
This theory suggests that firms prefer foreign direct investment over licensing to retain control over their technological know-how, and to manage and coordinate their operations better across different locations.
Similar Questions
Which of the following is a simple way to think about international licensing? Group of answer choices It is like foreign direct investment without the investment. It kind of has a joint venture vibe. It is an export of a firm’s competitive advantage rather than products and services embodying that advantage. It is like domestic licensing, only international.
The "Eclectic Paradigm" by John Dunning identifies three categories of gains from international production, which of the following is NOT one of these categories? The "Eclectic Paradigm" by John Dunning identifies three categories of gains from international production, which of the following is NOT one of these categories? Ownership-specific assets Interest rate advantage Internalisation advantages Location advantages
Foreign Direct Investments are examples of globalization through
Fill in the Blank QuestionFill in the blank question.Companies that want to retain control and are willing to invest resources in international business will consider investment, which is the ownership of overseas facilities.
Foreign direct investment in the United States by German companies is an example of __________.a.)market targetingb.)globalizationc.)briberyd.)strategic planning
Upgrade your grade with Knowee
Get personalized homework help. Review tough concepts in more detail, or go deeper into your topic by exploring other relevant questions.