Therefore we can expect their combined impact to

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Unformatted text preview: . Therefore, we can expect their combined impact to result preference for investment modes when oth factors are high, anda preference b for no involvement when both factors are low. This expectation is trivial as it does not add a ny new information about firms’ behavior except maybe strengthening the direct effects o each factor. A more interesting question f is how larger and more multinational f irms respond in countries that have relatively lower market potential, vice versa. A cursory review of actual and I I CHOICE OF FOREIGN MARKET ENTRY MODE 7 f r choices shows that investment modes may be chosen by larger multiim national f m even in lowpotentialcountries,and by smaller andless multinational firms in high potential countries. Countries that have relatively lower market potential can be expected to have a lower likelihood of attracting foreign firms. However,firms that are larger and that have a regional or worldwide presencemay be interested in entering these markets for achieving their growth and profit objectives....
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