The management team at Yum BBQ Brands has decided not to license its product because of concerns that this will create opportunities for another company to have access to their secret recipe. For this reason, the company decides that FDI is their best course of action. Which economic theory does their choice represent?

Question

Quizplus · Accepted Answer

Internalization theory suggests that companies prefer FDI over licensing to maintain control over proprietary knowledge and avoid the risk of losing competitive advantages, such as a secret recipe.

The Management Team at Yum BBQ Brands Has Decided Not