If BMW chooses to have some FDI in China, instead of selling its technology to a Chinese firm for a fee, this is an example of:

Question

Quizplus · Accepted Answer

Internalization refers to a company choosing to invest in foreign countries by establishing its operations directly, rather than licensing its technology or outsourcing production. This option allows BMW to keep greater control over its technology and production, as well as to benefit from the location advantages of China. Internalization refers to a firm's decision to produce goods or services itself rather than contracting with another firm to produce them. In this case, BMW is choosing to invest in China by setting up a foreign direct investment, which means they will be producing and selling their products directly in China rather than selling their technology to a Chinese firm for a fee. This decision is an example of internalization.

If BMW Chooses to Have Some FDI in China, Instead