Question
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?
The correct answer is
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.
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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?
- The exporting firm is termed 'rider' where the other firm with an established distribution channel in the target country is termed as 'Carrier'. This phenomenon is known as:
Which proposition best represents the central learning–commitment mechanism of the Uppsala internationalisation process model?
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