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Unformatted text preview: nvestment modes. The combined effect that firms
take a risk-averse stance and choose limited involvementin such markets.
From an entry mode perspective, exportings preferred to (a) no involvement,
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
to develop differentiated p o u t ) (b) a joint venture if contractual risks are
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,
and prefer entry through exporting when the potential for other modes
The joint venture mode is preferred by larger and more multinational
It is also preferred by smaller and less multinational f r s in high potential
markets. On the ot...
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- Summer '14