Which of the following modes of serving foreign markets requires the least capital investment by the MNE but risks the loss of key technological or managerial expertise to the marketplace?
A) acquisition
B) licensing
C) Greenfield investment
D) portfolio investment

Question

Quizplus · Accepted Answer

Licensing involves allowing a foreign company to use the MNE's intellectual property or technology in exchange for royalties or fees. This mode of serving foreign markets does not require a significant capital investment by the MNE, but it does involve some risk of losing key technological or managerial expertise to the marketplace, as the licensee gains access and knowledge of the MNE's proprietary information.

Which of the Following Modes of Serving Foreign Markets Requires