We speculate however that the need to establish

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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 i 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 s 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 help reduce the investment risk for the firm. H5: I countries characterized by high market potential and high n 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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