Question

question 19 5 pts identify a true statement about foreign licensing.
○ it is the costliest form of direct investment.
○ it is one of the means to seek foreign suppliers.
○ it is especially common in the food and beverage industry.
○ it is the most basic level of international market development.

Explanation:

• Analyze each option:
• Option 1: Foreign licensing is not a direct investment (direct investment involves owning/operating, licensing is a contractual arrangement), so this is false.
• Option 2: Foreign licensing is about granting rights to use intellectual property, not seeking suppliers, so false.
• Option 3: Franchising is more common in food/beverage, licensing is more for tech/intellectual property, so false.
• Option 4: Foreign licensing (allowing foreign firms to use IP) is a basic entry mode as it's less complex/risky than others like FDI, so this is true.

Answer:

D. It is the most basic level of international market development.