In such countries firms prefer to simply export it is

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Unformatted text preview: nvestment modes. The combined effect that firms suggests take a risk-averse stance and choose limited involvementin such markets. From an entry mode perspective, exportings preferred to (a) no involvement, i if f irms have the abilityto develop differentiated products and if contractual r isks are high (this effect is considerably weakenedfor f m s w t the ability ih to develop differentiated p o u t ) (b) a joint venture if contractual risks are rdcs; high; and (c) asole venture if contractual risks are high. On the other hand, preference for exporting is found to be relativelylow in high potential markets indicating that high retum/high risk investment modes are better modes in such markets. These resultsimply a tendencytoavoidentry through exporting when potential returns through other modes high, the are and prefer entry through exporting when the potential for other modes risks are high. The joint venture mode is preferred by larger and more multinational firms. It is also preferred by smaller and less multinational f r s in high potential im markets. On the ot...
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