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Unformatted text preview: ever, that the need to establish market presence in high
potential countries may be traded against the need to minimize investment
risks. Fitms may therefore chooseto export or create joint ventures because
these modes not only insulate them somewhat fiom investment risks, but
also provide access to 'markets. In the case of exporting, the investment to
exploit the foreign markets made in the home country and hence provides
immunity from investment r isks in the host countries. In the case of joint
ventures, a part of the risk i shifted to a partner in the host country who
can also help in negotiations with the host government and thus
the investment risk for the firm. H5: I countries characterized by high market potential and high
investment risk, f m may show a higher preference for exporting
and joint venture modes.
METHOD Research Setting In order to test the above hypotheses, the U.S. equipment leasing industry
(a service industry) has been chosen or this study. Although theFDI theo...
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- Summer '14