resoponse of the reader

Although this article is outstanding and makes a compelling point on the three types of company finance, it is influenced by the author’s familiarity with his mother’s Assisted Living facility and therefore his disproportionate affinity for bonds. He overlooks the fact that, due to the volatility of returns, few people are likely to invest in bonds. Furthermore, individuals who receive equity and debt financing are responsible to an outside power and therefore must play their cards correctly in order to prosper, as opposed to shares, which have no external influence (Lee, Shin & Park, 2012). Brooks makes an excellent argument on the subject by giving both the advantages and disadvantages of the tree forms of business financing. His preferred mixed approach to financing as used on Facebook and other media companies is the best as it shares advantages of all the forms hence minimizing risks (Shourideh & Zetlin-Jones, 2012).

Post 3: Cindy Hilton

This is an interesting comparison of the two FDI strategies done by explaining the terms of the two theories. I agree with Cindy in the fact that the two theories are applicable under different circumstances. While the internalization theory favors movements into new markets, Knickerbockers’ will work in an oligopolistic situation (Brush, 2012). The former is common among telecommunication companies while the latter takes charge in the oil industry (Ietto-Gillies, 2012).

Post 4: Consuelo Rubio

The post argues that most companies prefer the internalization theory in which companies license others to act on their behalf. This is true as most companies prefer to license other than export products, perishable or imperishable. However, the most important driving factor in the choice is the limitation of culture rather than its efficiency in creating a brand identity (Ietto-Gillies, 2012). Consequently, this choice has more challenges than the Knickerbockers’ theory.

References

Brush, C. (2012). International entrepreneurship: The effect of firm age on motives for internationalization (Vol. 5). Routledge.

Ietto-Gillies, G. (2012). Transnational corporations and international production: concepts, theories and effects. Edward Elgar Publishing.

Lee, Y., Shin, J., & Park, Y. (2012). The changing pattern of SME’s innovativeness through business model globalization. Technological Forecasting and Social Change, 79(5), 832-842.

Shourideh, A., & Zetlin-Jones, A. (2012). External financing and the role of financial frictions over the business cycle: Measurement and theory.