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Unformatted text preview: H3: Finns that have higher ability to develop differentiated products
are more likely to choose a sole venture mode in markets that
have high investment fisk; on the other hand, firms that are CHOICE OF FOREIGN MARKET ENTRY MODE 9 larger and have higher multinational experience may have a lower
probability of choosing asole venture modein such countries. Ownership Advantages and ContractualRisk me main effect of internalization advantage suggested that firms will r h
from entering a country if the perceived risk of dissipation of knowledge,
risk of deterioration of quality of services, and costs of writing and enforcing
contracts areh igh. This is particularly criticalfor f m that have specialized
howledge, protection of which must bean important priority [Hill, Hwang
and Kim 19901. However, these firms are also interestedin maximizing the
economic rents on their knowledgea suggested by the main effect of this
factor). This creates a decision scenario in which the need for protection
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This document was uploaded on 03/22/2014.
- Summer '14