Question

If a business has an internalization advantage, it is more likely to

a. engage in contract manufacturing
b. own a resource that gives it a competitive advantage over its rivals
c. face the liability of foreignness
d. use FDI as a market-entry strategy

Answer 1

Answer:

D

Explanation:

The internalization theory suggests that a firm would engage in foreign direct investment when it has an internalization advantage.

The internalization advantages include :

• technical know-how
• goodwill
• good management

Foreign direct investment can be described as when a company or an individual invests in a business located in another country.