Exam 8: Foreign Direct Investment

Because licensing is more costly and more risky than FDI, other things being equal, the theories argue that FDI is preferable to licensing.

Which of the following is a direct consequence of the interdependence between firms in an oligopoly?

Countries adopting a pragmatic stance pursue policies designed to maximize the national benefits and minimize the national costs.

The amount of foreign direct investment (FDI) undertaken over a given time period is known as the flow of FDI.

The stock of FDI refers to the

What are the ways in which host governments restrict inward FDI?

Developing nations currently account for ________ of FDI in the form of cross-border mergers and acquisitions.

Which political view allows FDI so long as the benefits outweigh the costs?

Describe some home-country policies that encourage outward FDI.

Discuss the trends in FDI over the past 30 years. Be sure to differentiate between the stock of FDI and the flow of FDI.

________ arise(s) from using resource endowments or assets that are tied to a particular foreign location and that a firm finds valuable to combine with its own unique assets.

Which view of FDI traces its roots to classical economics and the international trade theories of Adam Smith and David Ricardo?

Which of the following arises when a country is importing more goods and services than it is exporting?

Which of the following factors has had a positive effect on the volume of foreign trade investments?

By placing tariffs on imported goods, governments can increase the cost of exporting relative to foreign direct investment and licensing.

The ________ and Knickerbocker's theory of FDI tend to be less useful from a business perspective because they are descriptive rather than analytical.

________ traces its roots to Marxist political and economic theory.

The free market view argues that international production should be distributed among countries according to the

The ________ suggests that a firm will establish production facilities where foreign assets or resource endowments that are important to the firm are located.

What are the major drawbacks of licensing according to the internalization theory?