Identify the theory that seeks to explain why firms often prefer foreign direct investment over licensing as a strategy for entering foreign markets.
A) Internalization theory
B) Product life-cycle theory
C) Perfect markets theory
D) Random walk theory

Question

Quizplus · Accepted Answer

A branch of economic theory known as internalization theory seeks to explain why firms often prefer foreign direct investment over licensing as a strategy for entering foreign markets (this approach is also known as the market imperfections approach).

Identify the Theory That Seeks to Explain Why Firms Often