Running Head: THEORETICAL EXPLANATION OF FDI
Theoretical Explanation of FDI
THEORETICAL EXPLANATION OF FDI
The international theory basically seeks to give an explanation why companies or firms
often times have more preference on foreign direct investment as compared to licensing as the
best strategy for entering the foreign markets. The internationalization theory moreover explains
that licensing as an approach for venturing into foreign markets has three main disadvantages.
These drawbacks include possibility of resulting to firms giving away competitive technology,
on the same note licensing in most cases does not permit a co...