Which of the following theories identifies the non-transferability of resources as a reason for international business?
A) theory of comparative advantage.
B) imperfect markets theory.
C) product cycle theory.
D) none of the above

Question

Quizplus · Accepted Answer

The imperfect markets theory identifies non-transferability of resources as a reason for international business. This theory suggests that resources are not perfectly mobile across countries due to market imperfections, such as differences in legal systems, cultural barriers, and transportation costs, which create opportunities for companies to engage in international trade and investment to benefit from differences in resource endowments and prices. The theory of comparative advantage and product cycle theory focus on different reasons for international business, such as differences in relative efficiency and innovation capabilities, respectively.

Which of the Following Theories Identifies the Non-Transferability of Resources