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Unformatted text preview: ne the effect interrelationhs
ships among a f m ’ s ownership (ability to develop differentiated products,
size and multinational experience), location (market potential and investment risk) and internalization advantages (contractual r isks) on its choice
of entry modes in foreign m r e s The results provide broad support for the
hypothesized effects the interrelationships, while simultaneously confirming
previous findings on the separate effects of each type of determinant.
The findings of t i study imply that though firms would like to establish
market presence in foreign countries through direct investment, ability
to do so is constrained by their size’andmultinational experience. In addition,
while the results support the general belief that m use investment modes
only in high potential markets, they also suggest that some f m s (large
multinationals) may investinrelativelylowerpotential
markets if their
strategic objectives dictateso. However, firms are hesitant to enter markets
that are considered risky. Such caution appears understandable. The longterm success of a ny foreign investment requires signific...
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- Summer '14