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21.An international joint venture is an example of mutually beneficial direct foreign investment.

22.One of the disadvantages of global joint ventures is that, unlike licensing and franchising, they do not help companies to avoid tariff and nontariff barriers to entry.

23.Global joint ventures can be difficult to manage because they represent a merging of four cultures.

24.Unlike licensing, franchising, or joint ventures, wholly owned affiliates are 100 percent owned by the parent company.

25.Deciding where to go global is just as important as deciding how your company will go global.

26.Two factors that help companies determine the growth potential of foreign markets are purchasing power and foreign competitors.

27.The criteria for choosing an office/manufacturing location are different from the criteria for entering a foreign market.

28.When conducting global business, companies should attempt to identify the two types of political risk, which are political uncertainty and economic uncertainty.

29.The three strategies used to minimize or to adapt to the political risk inherent to global business are avoidance, control, and cooperation.

30.A global business can prevent or reduce political risks by using a proactive strategy in which it lobbies foreign governments or international trade agencies to change laws, regulations, or trade barriers.



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