Question

Some reasons firms internationalize are ___________

I. Narcissistic CEOs
II. Trade barriers
III. Imperfect Labor Markets
IV. Intangible Assets
V. Vertical Integration
VI. Product Life Cycle
VII. Ethnocentrism

Group of answer choices

A)I, II, III, V, VI

B)II, III, IV, V, VI

C)I, II, III, IV, V, VI, VII

D)II, III, IV, V, VI, VII

E)I, II, III, IV only

Answer 1

the answer is : B) II,III,IV,V,VI

The reasons firms may choose to expend business internationally can be due to various reasons.

a) existence of trade barriers in a specific industry in a specific country or region may motivate to the businesses to take up the project in another country/region

b) Availability of workforce and cheaper labour costs

c) Availability of skilled workforce to develop and provide assistance with respect of R&D of intangible assets. Also Trademarking and other IP regulations may affect the decisions of the firms

d) Vertical integration for eg., through cross border mergers

e) Product Life cycle - based on the demand and competition in the international markets, the firms can opt to trade internationally thereby making of use of demand supply gap in other markets.

ETHNOCENTRISM

It is a belief of superiority of one's own nation/culture/race/religion to that of others. It proves as a hindrance to effective expansion of business .