Imperfections in the market for intangible assets can also play a major role in motivating firms to undertake cross-border acquisitions.According to the internalization theory,
A)cross-border acquisitions may also be motivated by the acquirer's desire to acquire and internalize the target firm's intangible assets.
B)a firm with intangible assets that have a public good property such as technical and managerial know-how may acquire foreign firms as a platform for using its special assets on a larger scale and,at the same time,avoid the misappropriation that may occur while transacting in foreign markets through a market mechanism.
C)the internalization,thus,may proceed forward to internalize the acquirer's assets,or backward to internalize the target's assets.
D)all of the options

Question

Quizplus · Accepted Answer

All of the options are correct. Cross-border acquisitions can be motivated by the desire to acquire and internalize the target firm's intangible assets, especially those with a public good property. Such assets can be used more effectively on a larger scale and provide benefits from avoiding potential misappropriation while transacting through a market mechanism. Internalization can proceed in two directions, either forward to internalize the acquirer's assets, or backward to internalize the target's assets.

Imperfections in the Market for Intangible Assets Can Also Play