A primary advantage of licensing is that the firm does not have to bear the development costs and risks associated with opening a foreign market.

Question

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When a firm licenses its technology or product to another firm in a foreign market, the licensee is responsible for the costs and risks associated with developing and introducing the product in that market. This allows the licensor to enter the market without having to invest significant amounts of money or take on the risks associated with entering a new market. Therefore, 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.

A Primary Advantage of Licensing Is That the Firm Does