In a short essay, describe three advantages of licensing ...

[mydiamond]

In a short essay, describe three advantages of licensing agreements from the perspective of the licensor.
 
  What will be an ideal response?

Question 2

The collaboration between public and private sectors in an attempt to initiate economic development is known by which of the following terms?
 
  A) national endowment policy
  B) national fiscal policy
  C) national industrial policy
  D) national globalization policy

[matt95]

Answer to Question 1

Licensing requires neither substantial capital investment nor direct involvement of the licensor in the foreign market. Unlike other entry strategies, the licensor need not establish a physical presence in the market or maintain inventory there. Simultaneously, the licensee benefits by gaining access to a key technology at a much lower cost and in less time than if it had developed the technology itself. Licensing makes entry possible in countries that restrict foreign ownership in security-sensitive industries, such as defense and energy. Licensing also facilitates entry in markets that are difficult to enter because of trade barriers, tariffs, and bureaucratic requirements, which usually apply only to exporting or FDI. Licensing can be used as a low-cost strategy to test the viability of foreign markets. By establishing a relationship with a local licensee, the foreign firm can learn about the target market and devise the best future strategy for establishing a more durable presence there. Licensing also can help the firm develop its brand name in a target market and preempt the later entry of competitors.

Answer to Question 2

C