Identify the Theory That Seeks to Explain Why Firms Often

question 21

Multiple Choice

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

• A) Internalization theory
• B) Product life-cycle theory
• C) Perfect markets theory
• D) Random walk theory

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Definitions:

Mapping

The process of representing or outlining the relationship between elements in a space or concept.

Implicit Assumption

An underlying premise that is taken for granted or understood without being explicitly stated.

Guidance

The act of offering direction, advice, or instructional information to another, usually aimed at achieving a goal or solving a problem.

Explicit Reason

A clear and detailed reason that is directly stated or explained, without ambiguity.