Identify the theory that seeks to explain why firms often prefer foreign direct investment over licensing...

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Identify the theory that seeks to explain why firms often prefer foreign direct investment over licensing...

Identify the theory that seeks to explain why firms often prefer foreign direct investment over licensing as a strategy for entering foreign markets.

		Internalization theory
		Product life-cycle theory
		Perfect markets theory
		Random walk theory

business Operations-Management

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Answer 1

Answer #1

Answer: Option A - Internalization theory

Explanation: The theory of internalization focuses on the imperfection present in present markets. It analyses international business behavior. This theory can explain why firms would prefer FDI over licensing.

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Answer 2

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Identify the theory that seeks to explain why firms often prefer foreign direct investment over licensing...