Licensing generally involves smaller up-front risks and expenditures than other foreign market entry modes.

Question

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Licensing involves granting the right to use a company's intellectual property or technology to a foreign partner in exchange for royalties or other compensation. Compared to other foreign market entry modes such as direct investment or acquisition, licensing generally involves lower up-front costs and risks since the licensee assumes most of the operational and financial responsibilities. However, licensing may also limit a company's control over how its technology or brand is used and may result in lower profits in the long run.

Licensing Generally Involves Smaller Up-Front Risks and Expenditures Than Other