Exam 14: Foreign Direct Investment and Collaborative Ventures

By establishing a physical presence inside a country or an economic bloc, the foreign company obtains the same advantages as local firms.

One of the key advantages to an equity joint venture is that the management structure is very simple which allows for easy adjustments and modifications.

Economies of scale are decreases in per-unit cost of production resulting from decreasing output.

Many international firms are investing in local communities and establishing global standards of fair treatment for workers in an effort to be socially responsible.

Which of the following most likely supports the decision by Ciao managers to build a plant in Russia?

In the context of attaining economies of scope, using individual managers in each European country is more efficient that using the same base of managers all over Europe.

Which of the following questions would most likely be important for ABC managers to evaluate as they consider expanding into the Asian market?

Firms often follow their key customers abroad to preempt other vendors from serving them.

Describe the advantages of international collaborative ventures, and describe the potential risks of collaboration.

What makes China popular for FDI? What factors contribute to the long-term popularity of FDI in advanced economies?

Vertical integration is an arrangement in which the firm owns, or seeks to own, the activities performed in a single stage of its value chain.

Which of the following best exemplifies corporate social responsibility?

The rate of inflation is a(n)________ factor to be considered while selecting the location for FDI.

International expansion invariably results in a decrease in a firm's economies of scale.

Discuss the four key differences between project-based, nonequity ventures and equity ventures.

Equity joint ventures have the simplest management structure.

The failure rate of collaborative ventures is higher in developing economies than in advanced economies.

Firms that anticipate close public scrutiny of their foreign operations often avoid potential difficulties by ________.

Which of the following most likely supports a decision to enter the Asian market by building a factory near Tokyo?

Which of the following should be considered in the decision regarding where to build a new Ciao plant?