A domestic firm and a foreign firm sharing the cost of developing new products or building production facilities in a foreign country constitute a ________.
A) franchising agreement
B) joint venture
C) foreign subsidiary
D) brokering agreement

Question

Quizplus · Accepted Answer

A joint venture is a partnership between a domestic and foreign firm to share the costs and risks of developing new products or building production facilities in a foreign country. Franchising involves one firm (franchisor) granting another firm (franchisee) the right to use its brand name, products, or services. A foreign subsidiary is a company that is owned and controlled by a foreign parent company. Brokering agreement refers to a contract between a broker and a client, where the broker acts as an intermediary to facilitate a transaction.

A Domestic Firm and a Foreign Firm Sharing the Cost