Question 1

The demonstration effect refers to the ability of a firm to engage in an upstream stage of the value chain in a host country.

Accepted Answer

A) True 
 B)False

Question 2

Compared to licensing,FDI increases dissemination risks.

Accepted Answer

A) True 
 B)False

Question 3

A type of FDI in which the firm moves upstream or downstream in different value chain stages in a host country is called horizontal FDI.

Accepted Answer

A) True 
 B)False

Question 4

A firm manufacturing clocks in its home country and through FDI is an example of downstream vertical FDI.

Accepted Answer

A) True 
 B)False

Question 5

Internalization can help reduce opportunistic behavior in international trade.

Accepted Answer

A) True 
 B)False

Question 6

Intrafirm trade enables MNEs to better coordinate cross-border activities.

Accepted Answer

A) True 
 B)False

Question 7

_____ is the amount of FDI moving in a given period (usually a year) in a certain direction.

Accepted Answer

A)  FDI stock 
B)  FDI flow 
C)  Horizontal FDI 
D)  Vertical FDI 
A)  FDI stock 
B)  FDI flow 
C)  Horizontal FDI 
D)  Vertical FDI

Question 8

_____ refers to the problems associated with unauthorized diffusion of firm-specific know-how.

Accepted Answer

A)  Knowledge spill 
B)  Dissemination risk 
C)  Market imperfection 
D)  Technological spill 
A)  Knowledge spill 
B)  Dissemination risk 
C)  Market imperfection 
D)  Technological spill

Question 9

Expropriation refers to the knowledge diffused from one firm to others among closely located firms.

Accepted Answer

A) True 
 B)False

Question 10

Explicit knowledge is noncodifiable and its transfer requires hands-on practice.

Accepted Answer

A) True 
 B)False

Question 11

Oligopoly happens when an industry is dominated by one company.

Accepted Answer

A) True 
 B)False

Question 12

_____ knowledge is noncodifiable and its acquisition and transfer requires hands-on practice.

Accepted Answer

A)  Explicit 
B)  Tacit 
C)  Lucid 
D)  A priori 
A)  Explicit 
B)  Tacit 
C)  Lucid 
D)  A priori

Question 13

The free market type of FDI is the most prevalent type of FDI practiced.

Accepted Answer

A) True 
 B)False

Question 14

In Round Two of FDI negotiation process between MNEs and host governments,_____.

Accepted Answer

A)  the government may demand renegotiations of the deal 
B)  the MNE is not willing to enter in the absence of some government assurance 
C)  the previous deal becomes obsolete 
D)  the MNE enters the host market and earns profits 
A)  the government may demand renegotiations of the deal 
B)  the MNE is not willing to enter in the absence of some government assurance 
C)  the previous deal becomes obsolete 
D)  the MNE enters the host market and earns profits

Question 15

An FDI investment is not considered a zero-sum game.

Accepted Answer

A) True 
 B)False

Question 16

MNEs encounter sunk costs when they face an obsolescing bargain with the host country.

Accepted Answer

A) True 
 B)False

Question 17

If a firm engages in final assembly in its home operations,then which of the following operations of the firm in a foreign country would be considered a downstream vertical FDI?

Accepted Answer

A)  Research and development 
B)  Components procurement 
C)  Marketing 
D)  Final assembly 
A)  Research and development 
B)  Components procurement 
C)  Marketing 
D)  Final assembly

Question 18

OLI advantages refer to a firm's quest for _____via FDI.

Accepted Answer

A)  oligopolistic advantages, laissez-faire advantages, and intrafirm trade advantages 
B)  outsourcing advantages, licensing advantages, and importing advantages 
C)  organization advantages, leadership advantages, and innovation advantages 
D)  ownership advantages, location advantages, and internalization advantages 
A)  oligopolistic advantages, laissez-faire advantages, and intrafirm trade advantages 
B)  outsourcing advantages, licensing advantages, and importing advantages 
C)  organization advantages, leadership advantages, and innovation advantages 
D)  ownership advantages, location advantages, and internalization advantages

Question 19

_____ knowledge can be written down and transferred without losing much of its richness.

Accepted Answer

A)  Explicit 
B)  Implicit 
C)  Tacit 
D)  Inherent 
A)  Explicit 
B)  Implicit 
C)  Tacit 
D)  Inherent

Question 20

The radical view treats FDIs as an instrument of imperialism.

Accepted Answer

A) True 
 B)False

The demonstration effect refers to the ability of a firm to engage in an upstream stage of the value chain in a host country.

Compared to licensing,FDI increases dissemination risks.

A type of FDI in which the firm moves upstream or downstream in different value chain stages in a host country is called horizontal FDI.

A firm manufacturing clocks in its home country and through FDI is an example of downstream vertical FDI.

Internalization can help reduce opportunistic behavior in international trade.

Intrafirm trade enables MNEs to better coordinate cross-border activities.

_____ is the amount of FDI moving in a given period (usually a year) in a certain direction.

_____ refers to the problems associated with unauthorized diffusion of firm-specific know-how.

Expropriation refers to the knowledge diffused from one firm to others among closely located firms.

Explicit knowledge is noncodifiable and its transfer requires hands-on practice.

Oligopoly happens when an industry is dominated by one company.

_____ knowledge is noncodifiable and its acquisition and transfer requires hands-on practice.

The free market type of FDI is the most prevalent type of FDI practiced.

In Round Two of FDI negotiation process between MNEs and host governments,_____.

An FDI investment is not considered a zero-sum game.

MNEs encounter sunk costs when they face an obsolescing bargain with the host country.

If a firm engages in final assembly in its home operations,then which of the following operations of the firm in a foreign country would be considered a downstream vertical FDI?

OLI advantages refer to a firm's quest for _____via FDI.

_____ knowledge can be written down and transferred without losing much of its richness.

The radical view treats FDIs as an instrument of imperialism.

Globalizing Business

Understanding Formal Institutions: Politics, laws, and Economics

Emphasizing Informal Institutions: Cultures, ethics, and Norms

Leveraging Resources and Capabilities

Trading Internationally

Dealing With Foreign Exchange

Capitalizing on Global and Regional Integration

Growing and Internationalizing the Entrepreneurial Firm

Entering Foreign Markets

Managing Global Competitive Dynamics

Making Alliances and Acquisitions Work

Strategizing,structuring,and Learning Around the World

Competing on Marketing and Supply Chain Management

Managing Human Resources Globally

Financing and Governing the Corporation Globally

Managing Corporate Social Responsibility Globally

Filters

Exam 6: Investing Abroad Directly

The demonstration effect refers to the ability of a firm to engage in an upstream stage of the value chain in a host country.

Compared to licensing,FDI increases dissemination risks.

A type of FDI in which the firm moves upstream or downstream in different value chain stages in a host country is called horizontal FDI.

A firm manufacturing clocks in its home country and through FDI is an example of downstream vertical FDI.

Internalization can help reduce opportunistic behavior in international trade.

Intrafirm trade enables MNEs to better coordinate cross-border activities.

_____ is the amount of FDI moving in a given period (usually a year) in a certain direction.

_____ refers to the problems associated with unauthorized diffusion of firm-specific know-how.

Expropriation refers to the knowledge diffused from one firm to others among closely located firms.

Explicit knowledge is noncodifiable and its transfer requires hands-on practice.

Oligopoly happens when an industry is dominated by one company.

_____ knowledge is noncodifiable and its acquisition and transfer requires hands-on practice.

The free market type of FDI is the most prevalent type of FDI practiced.

In Round Two of FDI negotiation process between MNEs and host governments,_____.

An FDI investment is not considered a zero-sum game.

MNEs encounter sunk costs when they face an obsolescing bargain with the host country.

If a firm engages in final assembly in its home operations,then which of the following operations of the firm in a foreign country would be considered a downstream vertical FDI?

OLI advantages refer to a firm's quest for _____via FDI.

_____ knowledge can be written down and transferred without losing much of its richness.

The radical view treats FDIs as an instrument of imperialism.

Globalizing Business

Understanding Formal Institutions: Politics, laws, and Economics

Emphasizing Informal Institutions: Cultures, ethics, and Norms

Leveraging Resources and Capabilities

Trading Internationally

Dealing With Foreign Exchange

Capitalizing on Global and Regional Integration

Growing and Internationalizing the Entrepreneurial Firm

Entering Foreign Markets

Managing Global Competitive Dynamics

Making Alliances and Acquisitions Work

Strategizing,structuring,and Learning Around the World

Competing on Marketing and Supply Chain Management

Managing Human Resources Globally

Financing and Governing the Corporation Globally

Managing Corporate Social Responsibility Globally

Filters