The Scope of Which Activities a Firm Chooses to Conduct

question 30

True/False

The scope of which activities a firm chooses to conduct is largely a matter of transaction costs, economies of scope, and the cost of corporate complexity.

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Definitions:

Liability of Foreignness

The inherent disadvantages that foreign firms experience in host countries due to their non-native status, which can include cultural, legal, and economic barriers.

Nonequity Modes

Forms of international business that do not involve direct ownership of assets in another country, such as franchising or licensing.

Equity Modes

Refers to the different ways through which a company can enter and participate in foreign markets, such as joint ventures, mergers, or acquisitions.

First Entrant

Describes a business that is the first to enter a particular market or industry, potentially gaining competitive advantages.