It when a firm possesses the abilityto develop

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Unformatted text preview: ed products. it When a firm possesses the abilityto develop differentiated products, may run the risk of loss of long-term revenues if it shares this knowledge with host country firms. This is because the latter may acquire this knowledge and decide to operate as a separate entity at a future date. This risk is especially relevant for international transactions because interorganizational infrastructures are often poorly developed, likely to change frequently, and particularly weak across national boundaries [Van Ven and Poole 19891. de Therefore, when t he firm possesses these skills, higher control modes may be more efficient. There substantial empirical support for the of higher is use control modes with higher levels of product differentiation [Anderson and Coughlan 1987; Caves 1982; Coughlan 1985; Coughlan and Flaherty 1983; Davidson 1982; Stopford and Wells 19721. Firms need asset powerto engage in international expansion and successto fully compete with host country firms. Resources are needed for absorbing the high costs of marketing, for enforcing patents and contracts, and for achieving economies of scale [Hood and...
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This document was uploaded on 03/22/2014.

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