Which of the following is true of licensing?

Question

Quizplus · Accepted Answer

A licensing agreement is an arrangement whereby a licensor grants the rights to intangible property to another entity for a specified period in exchange for royalties.The primary advantage of licensing is that the firm does not have to bear the development costs and risks associated with opening a foreign market. As a result, licensing is a very attractive option for firms that lack the capital to open overseas markets. Licensing is also an attractive option when a firm is interested in pursuing a foreign market but does not want to commit substantial resources to an unfamiliar or potentially volatile foreign market. Licensing is also used when a firm wishes to participate in a foreign market, but is prohibited from doing so by barriers to investment. Finally, licensing is used when a firm possesses some intangible property but does not want to pursue a potential application itself.

Which of the Following Is True of Licensing