The difference between Internalization theory and imitative theory is

QUESTION

The difference between Internalization theory and imitative theory is that:

A. internalization theory does not explain why the first firm in an oligopoly decides to undertake FDI rather than to export or license.

B. imitative theory addresses the issue of whether FDI is more efficient than exporting or licensing for expanding abroad.

C. most economists favor imitative theory as an explanation for FDI.

D. no important aspect of FDI is explained by imitative theory.

E. internalization theory addresses the issue of efficiency of FDI over exporting or licensing.

ANSWER

E