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Unformatted text preview: en ifscale economies are not significant,
a fr may still choose investment modessince they provide the fr with
the opportunity to establish long-term market presence.
continuation of present economic and political conditions and government
policies which are critical to the survival and profitability
of a firm’soperations
in that country. Changes government policies
may cause problems related
to repatriationof earnings, and in extreme cases, expropriationof assets [Root
1987. Researchers have suggested that the restrictive policiesof a host country’s government are likelyto impede inward foreign investments [Rugmari
1979; Stopford and Wells 19721. In these countries, a fr would be better
off not entering; but if it does, i t may favor use of non-investment options. Internalization Advantage (Contractual Risk)
Low control modes are considered superior many transactions since they
allow a firm to benefit from the scale economies of the marketplace, while
not encounteringthe bureaucratic disadvantages that accompany integration
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This document was uploaded on 03/22/2014.
- Summer '14