Exam 6: International Trade and Investment

Why are the islands of the Caribbean so important to the United States both as a source and a destination of investment?

Your firm is considering the idea of foreign direct investment. What supply factors and demand factors are most relevant in this decision?

China is one of the primary recipients of FDI from the United States.

Examples of ownership advantage include which of the following?

What is the most likely characteristic of a firm that gains a first-mover advantage?

Explain the four elements of Porter's national competitive advantage theory.

Thanks to the emergence of China as a major exporting nation, Japan, Canada, the European Union, and the United States accounted for just 49.2 percent of the world's merchandise exports in 2017.

Dunning suggests that FDI will occur when there is an ownership advantage, a location advantage, and an internalization advantage.

Which international trade theory originated in the marketing field?

According to mercantilism, what should a country's primary goal be?

Political factors do not affect a firm's decision to undertake foreign direct investment.

Who developed the eclectic theory of international investment?

What are sovereign wealth funds (SWFs)?

Pandora Housewares is an MNE with production facilities in Taiwan, England, and India that manufacture bedding, towels, clothing, and luggage. Pandora has benefited from ________ because the firm's average costs have decreased as the number of different products it sells has increased.

International investment theories answer the question, "Why does foreign direct investment occur?"

Trade between two countries of goods produced by the same industry is known as interindustry trade.

The ________ suggests that a firm owning a valuable asset that creates a competitive advantage domestically can use that advantage to penetrate foreign markets through FDI.

Executives at Energex Enterprises are trying to determine whether it would be better to own and operate a factory overseas or to contract with a foreign firm to do this through a licensing agreement. Which theory would most likely help the Energex executives make this decision?

What is the key difference between the theory of comparative advantage and the theory of absolute advantage? Which theory do you support? Why?

In the United States, sugar growers, steel companies, and the AFL-CIO are supporters of mercantilist policies. These groups are best characterized as ________.