What Is a Nonequity Arrangement? Define the Two Major Types

question 65

Essay

What is a nonequity arrangement? Define the two major types of nonequity arrangements: licensing and turn-key projects,and give at least one advantage and disadvantage for each.
A.Licensing - involves an entrepreneur who is a manufacturer (licensee)giving a foreign manufacturer (licensor)the right to use a patent,trademark,technology,production process,or product in return for the payment of a royalty.
Benefit: Low development costs and risks.
Disadvantages: Lack of control over technology,inability to realize location and experience curve economies,inability to engage in global strategic coordination.
B.Turn-key projects - A method of doing international business whereby a foreign entrepreneur supplies the manufacturing technology or infrastructure for a business and then turns it over to local owners.
Benefits: relatively low risk,ability to earn returns from process technology skills in countries where FDI is restricted.
Disadvantages: Creation of efficient competitors,lack of long-term market presence.

---

Definitions:

Mechanistic Researcher

A scientist who explores the fundamental processes and workings underlying a particular phenomenon or system, focusing on its components and functions.

Violent Video Games

Digital games characterized by actions that involve physical force intended to hurt or kill characters within the game.

Aggression

A range of behaviors intended to harm or injure another living being who is motivated to avoid such treatment.

Neurotransmitters

Chemicals that transmit signals across a synapse from one neuron to another in the brain and nervous system.