The greater the pressures for cost reductions are,the more likely an international firm will want to pursue some combination of exporting and wholly owned subsidiaries.

Question

Quizplus · Accepted Answer

When cost reduction pressures are high, international firms will try to find ways to lower their costs. Exporting allows them to avoid some of the costs of establishing and operating subsidiaries in foreign countries, while wholly owned subsidiaries allow them to have more control over their operations and potentially lower costs in the long run. Therefore, a combination of these two strategies may be the most effective for firms looking to reduce costs.

The Greater the Pressures for Cost Reductions Are,the More Likely