Which of the following is a condition of Dunning's eclectic ...

[cabate]

Which of the following is a condition of Dunning's eclectic theory?
 
  A) The firm must own a competitive advantage that overcomes competing against foreign firms in their markets.
  B) Research and development costs must outweigh expenses related to foreign direct investment.
  C) The firm must benefit more from outsourcing a service than controlling a foreign business.
  D) Business activity must be more profitable in a domestic location than in a foreign location.

Question 2

International business differs from domestic business in several ways. Identify at least three of these differences and describe their implications for companies.
 
  What will be an ideal response?

[Sarahjh]

Answer to Question 1

A

Answer to Question 2

The countries involved may use different currencies, requiring currency conversion and introducing exchange rate risk. Because the legal systems are different, one or more parties must adjust their practices to comply with local laws. Cultural differences and the availability of resources affects production of various items and production methods.