The decision to establish foreign manufacturing operations through direct investment or licensing depends on
A) the extent to which capital is used in the production process.
B) the size of the foreign market.
C) the amount of fixed cost a firm must bear when establishing an overseas facility.
D) All of these are correct.

Question

Quizplus · Accepted Answer

All of the factors mentioned in the options - the extent of capital use, size of the foreign market, and fixed costs - are important considerations when deciding between direct investment or licensing. Therefore, the best answer is D.

The Decision to Establish Foreign Manufacturing Operations Through Direct Investment