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Unformatted text preview: al risks also do not pose a threat to irms that have ownership
advantages arising from size and multinationality as much as they d o to
ownership advantages arising from its knowledge base and hence are not
considered here. Market Potential and Investment Risk
The direct effect of high market potential indicates a choiceof investment
modes, while l w market potential indicates a choice of no entry. the other
hand, the direct effect high investmentrisk indicates a choice of no entry
while low investment risk indicates a choice of investment modes. The combined effect of market potential and investmentisk, therefore, for high/low
combination should be an investment mode and f or lowhigh combination 10 JOURNAL OF INTERNATIONAL BUSINESS STUDIES, FIRST QUARTER 1992 should be no entry. However, it is not clear what modes are likely to be
chosen in countries that have high market potential and at the same time
are characterized by high investment risks. While this interaction effect is
intuitively interesting, a review the literature did not provide theoretical
rationale or empirical evidence that could shelp
u develop a specific hypothesis.
We speculate, how...
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- Summer '14