Question

Question 20 1 pts Which of the following is an advantage of wholly owned subsidiaries as a mode of entry into foreign markets? A foreign firm is relieved of many of the costs and risks associated with opening a foreign market on its own. The risk of losing control over a firm's technological competence is reduced. O A foreign firm is insulated completely from the threat posed by high transport costs. O It is the most politically acceptable mode of entry into foreign markets. O It helps create competition which in turn increases the quality of production. < Previous Next →

Answer 1

Answer to the question:

Option b: The risk of losing control over a firm's technological competence is reduced.

Explanation: The MNCs are well equiped and has technological advantages and on the basis of this they can compete with the other firms interntionally. When they set up their subsidieries in other countries they generally keep the whole control with the mother firm. This is because they try others not to copy their thechnology which is giving them an edge in the international market. So, they keep whole control of the subsidieries with the mother firm

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