Exam 6: Investing Abroad Directly

The television industry in the United States is controlled by seven giant corporations: The Walt Disney Company,CBS Corporation,Viacom,Comcast,Hearst Corporation,Time Warner,and News Corporation.Thus,the television industry in the U.S.is a typical _____ industry.

Explain the location advantages of FDI.Discuss the value of acquiring and neutralizing location advantages with an example that highlights how a location advantage does not necessarily overlap a country-level advantage.

In order to become an MNE,an exporter has to undertake FDI.

Costs that a firm has to endure even when its investment turns out to be unsatisfactory are referred to as _____.

Domestic transaction costs tend to be higher than international transaction costs.

FPI refers to the _____.

Dissemination risk refers to the cost that a firm has to endure even when its investment turns out to be unsatisfactory.

FPI refers to investment in a portfolio of foreign securities that do not entail the active management of foreign assets.

An FPI does not provide management control rights to the investing firm.

Firms prefer FDI to licensing because FDI_____.

Government's confiscation of foreign assets is known as _____.

Expropriation refers to the rewarding of property rights and incentives to MNEs from the host country.

Differentiate between the primary characteristics of horizontal and vertical FDI.

Which of the following political perspectives maintains the view that FDI has both pros and cons and can only be approved when its benefits outweigh costs? 

In the context of FDI,ownership refers to MNEs' possession and leveraging of certain valuable,rare,hard-to-imitate,and organizationally embedded (VRIO) assets overseas.

Compared to licensing,FDI provides more direct and tighter control over foreign operations.

Describe the process of obsolescing bargain between MNEs and governments.

A firm establishing a manufacturing plant in a foreign country due to the cheap labor costs in that country is an example of the _____ advantage that the firm enjoys.

_____ refers to the reaction of local firms to rise to the challenge demonstrated by MNEs through learning and imitation.

Repatriated earnings from profits of MNEs benefit the host country financially.