In which international structure would royalties likely be paid to the exporter?
A) By a branch office
B) Under a licensing arrangement
C) By a subsidiary manufacturing plant
D) In a joint venture
E) In a strategic alliance

Question

Quizplus · Accepted Answer

Royalties are typically paid under a licensing arrangement, where the exporter grants the right to use their intellectual property (such as patents, trademarks, or copyrights) to a licensee in another country in exchange for a fee, typically calculated as a percentage of revenues. This is a common way for companies to generate income from their intangible assets without having to invest in physical operations in the foreign market.

In Which International Structure Would Royalties Likely Be Paid to the Exporter