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A company must also frame any decision to enter a foreign market in the risks associated with the market.
Under the communist regime, the Soviet Union had taken complete control of the oil industry. Through its structure and rules, the government managed to create tremendous market inefficiencies. With the decline of the centrally-planned economy, the oil industry started opening up to foreign investment. As is consistent with the theory of location-specific advantages, foreign firms were very attracted to the opportunity to combine their unique assets (technology, capital, know-how, etc.) with access to the oil located in Russia...
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