Firms become multinational when they have an ownership advantage in their domestic country in terms of patents or some kind of expertise. When a firm holds a patent for a product in its own country it will look for ways to sell the product in the foreign market also. Here the firm does not face any risk of its domestic market for the product being taken over. The ownership advantage can also be described in terms of the assets that the firm may own overseas (Ghahroudi, 2009). In this it can be said to be in a foreign equity relationship. A firm that does only exports and has contractual agreements with foreign nations can be said to be in non-equity mode. In an equity mode the company will either be in a joint venture or will wholly own the subsidiaries. A firm will become an MNE when it enters foreign markets via the equity mode only.