Which international entry mode grants a local company the right to use a specified patent or production process for a royalty, allowing the foreign company to earn revenue without equity ownership in that country?
Licensing
Licensing permits a local firm to use specified intellectual property, such as a patent or production process, for a fee or royalty. The foreign licensor can therefore earn revenue without owning equity in the local business.
Important Questions from Modes of entry into international business
In which one of the following modes of entry into foreign markets risk and profit potential are the highest?
Which proposition best represents the central learning–commitment mechanism of the Uppsala internationalisation process model?
Counter–trade means :
In respect of international business, a project is called a turnkey project because :
Examine the following statements and choose the correct code :
Statement - (I) : Companies with Low cash reserves normally prefer Licensing mode rather than Foreign Direct Investment.
Statement - (II) : Cash rich firms normally prefer Foreign Direct Investment.
Codes :
