Even ifscale economies are not significant a fr may

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: en ifscale economies are not significant, a fr may still choose investment modessince they provide the fr with im im the opportunity to establish long-term market presence. Theinvestmentriskinahostcountryreflectstheuncertainty over the 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 in 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 im 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 for allow a firm to benefit from the scale economies of the marketplace, while not encounteringthe bureaucratic disadvantages that accompany integration [Williamson 1985...
View Full Document

This document was uploaded on 03/22/2014.

Ask a homework question - tutors are online