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UGF Lecture 7Management > Global Firm > Basis for I > Internalisation > Decision process 1 > Decision process 2 > Decision 2 continued > Negative LAs
Negative LAsInternalisation of technology can occur in the case of negative LAs (See Case B, lecture 6), where firms are forced to engage in outward FDI in the face of high tariff barriers (Fig.1).
Trade of technology cannot occur between firms in countries, so it is internalised. The parent company must also transfer the technology separately to each subsidy, which can be inefficient
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