When the commercial risk of investing in a foreign country is high, ﬁrms would prefer investing directly than selling franchises.

Question

Quizplus · Accepted Answer

When the commercial risk of investing in a foreign country is high, firms often prefer selling franchises as it allows them to mitigate risk by transferring it to the franchisee, rather than investing directly which would expose them to greater financial and operational risks.

When the Commercial Risk of Investing in a Foreign Country