If intellectual property rights in an emerging economy are not well-protected, the number of firms in the industry is rapidly growing, and the need for global integration is high, ____ is the preferred entry mode.

Question

Quizplus · Accepted Answer

In emerging economies with weak intellectual property protection, there is a high risk of intellectual property theft. Therefore, for firms that want to maintain control over their intellectual property, a wholly-owned subsidiary is the best entry mode as they have complete control over their assets and can protect their intellectual property. Exporting and licensing are not preferred as they expose the firm's intellectual property to potential theft. A strategic alliance is also not preferred as it requires sharing of intellectual property with the partner firm.

If Intellectual Property Rights in an Emerging Economy Are Not