In Which of the Following Situations Does the Internalization Theory

question 25

Multiple Choice

In which of the following situations does the internalization theory recommend FDI as opposed to licensing?

• A) When the firm has know-how that can be adequately protected by a licensing contract
• B) When the firm produces products that have a low value-to-weight ratio
• C) When a firm's skills and know-how are amenable to licensing
• D) When the firm needs tight control over a foreign entity

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Definitions:

Sinuosity

The measure of how much a river or stream meanders or the degree of its winding path.

Point Bar

A sedimentary formation consisting of alluvium, built up along the inner curve of rivers and streams beneath the slip-off slope.

Floodplain

An area of relatively smooth land adjacent to a stream channel that is intermittently flooded when the stream overflows its banks.

Sedimentation

The process by which material is deposited by wind, water, or ice, often resulting in layers of sediment that can eventually form sedimentary rocks.