Identify the advantage of establishing wholly owned subsidiaries.

Question

Quizplus · Accepted Answer

Establishing wholly owned subsidiaries allows a firm to have complete control over its operations and utilize its capabilities, location advantages, and experience curve economies fully. This is particularly true if the firm wishes to transfer highly specialized knowledge or technology to its subsidiary. However, political considerations and host-government regulations may make it difficult or even impossible to establish wholly owned subsidiaries, and it may not always be the least expensive mode of foreign market entry.

Identify the Advantage of Establishing Wholly Owned Subsidiaries