Internalization refers to the replacement of cross-border markets (such as importing and exporting) with one firm (the MNE) locating in two or more countries.

Question

Quizplus · Accepted Answer

Internalization is the process by which a firm replaces cross-border markets with its own internal market via investment in foreign countries. This process is also known as direct investment or multinational enterprise (MNE) activity. Therefore, the statement is true. Internalization refers to the process of a firm expanding beyond its domestic boundaries by locating in two or more countries, and replacing cross-border markets (such as importing and exporting) with its own internal operations. This is commonly associated with multinational enterprises (MNEs).

Internalization Refers to the Replacement of Cross-Border Markets (Such as Importing