Unformatted text preview: it impossible for some export goods to
compete against local goods in the target country. Thus high transportation costs discourage
export entry in favor of other modes that do not incur such costs. The target country’s
economy can also influence the choice of entry mode. Equity entry modes are usually not
possible in centrally planned sot economies, so companies wanting to do business in
with sot countries must rely on nonequity exporting, licensing or other contractual
modes. Furthermore, the size of the economy (as measured by gross national product), its
absolute level of performance (gross national product per capita), and the relative importance
of its economic sectors (as a percentage of gross national product) are of importance.
Generally these features relate closely to the market size for a company’s product in the target
country. The cultural distance also influences the choice of target countries, because
companies tend to first enter those foreign countries that are culturally close to the home
country (Root, 19...
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This document was uploaded on 03/22/2014.
- Summer '14
- The Land