International Business
Sixteenth Edition, Global Edition
Chapter 15
Forms and Ownership
of Foreign Production
Copyright © 2018 Pearson Education Limited. All Rights Reserved.
Copyright © 2018 Pearson Education Limited. All Rights Reserved.
Learning Objectives (1 of 2)
15-1 Comprehend why export and import may not
suffice for companies’ achievement of IB
objectives
15-2 Explain why and how companies make wholly
owned foreign direct investments
15-3 Ascertain why companies collaborate in
international markets
Copyright © 2018 Pearson Education Limited. All Rights Reserved.
Learning Objectives (2 of 2)
15-4 Compare and contrast forms of and
considerations for selecting an international
collaborative arrangement
15-5 Grasp why IB collaborative arrangements fail
or succeed
Copyright © 2018 Pearson Education Limited. All Rights Reserved.
Why Export and Import May Not
Suffice
Objective 15–1
•Advantages to locate production in another
country
–As opposed to exporting
Copyright © 2018 Pearson Education Limited. All Rights Reserved.
Alternatives to Foreign Expansion
Objective 15-1
Figure 15.2 Foreign Expansions: Alternative Operating Modes
Copyright © 2018 Pearson Education Limited. All Rights Reserved.
Why Wholly-Owned FDI?
Objective 15-2
•Market Failure
•Internalization Theory
•Appropriability Theory
•Freedom to Pursue Global Objectives
Why Wholly-Owned FDI?
14-7
