In the context of the modes of entering a foreign market, identify a difference between nonequity modes and equity modes.
A) Nonequity modes carry more risk than equity modes.
B) Nonequity modes bring fewer rewards than equity modes.
C) Unlike equity modes, nonequity modes allow a firm to get close to customers.
D) Unlike equity modes, nonequity modes solely include joint ventures.

Question

Quizplus · Accepted Answer

Nonequity modes, such as exporting and licensing, typically involve less control and investment in the foreign market, leading to potentially fewer rewards compared to equity modes like joint ventures and wholly owned subsidiaries, which require more significant investment and involvement but offer greater potential returns.

In the Context of the Modes of Entering a Foreign