In the context of the modes of entering a foreign market, which of the following is a difference between nonequity modes and equity modes?
A) Nonequity modes carry less risk than equity modes.
B) Nonequity modes bring more rewards than equity modes.
C) Unlike equity modes, nonequity modes allow a firm to get close to customers.
D) Unlike equity modes, nonequity modes solely include joint ventures.

Question

Quizplus · Accepted Answer

Nonequity modes of entering a foreign market, such as exporting and contractual agreements, involve less financial investment and risk compared to equity modes, which include joint ventures and wholly owned subsidiaries. Equity modes often require more substantial capital investment and entail greater risk due to the direct involvement in the foreign market.

In the Context of the Modes of Entering a Foreign