Exam 7: Foreign Direct Investment

Which of the following methods is used by a host country to restrict incoming foreign direct investment?

Explain the market power theory of FDI,and discuss why the decision whether or not to follow rivals into a new international market is important.

Identify why a home country might support or discourage outgoing foreign direct investment.

Why is it important to assess R&D costs when considering FDI? Given its costs,how can FDI benefit the host country with access to technology,management skills,and employment?

Scenario: Blickinstock at the Crossroads Auto parts supplier,Blickinstock Ltd.,would like to expand its presence in Latin America.To that end,Blickinstock is trying to decide whether to purchase an existing company in a remote region of Argentina or build its own subsidiary.Keith Moon,Blickinstock's vice president of global business development,will be making a presentation to the board outlining the company's options. -If Blickinstock's home government tries to stop the company from investing in Latin America,the government is most likely trying to ________.

Which of the following is used by home country governments to limit outbound foreign direct investment?

Scenario: Happyland Happyland is a country characterized by beautiful beaches,vast natural resources,and a highly skilled labor force.Happyland is now encouraging foreign direct investment flows.The country has been exporting textiles,computer hardware,and software programs.The net result of the trade is that Happyland exports far more goods and services and receives more income from abroad than it imports and pays abroad. -Happyland's international trade situation illustrates that the country is experiencing a ________.

One reason a home country may discourage foreign direct investment outflows is to protect its "sunset" industries.

________ is an investment that does not involve obtaining a degree of control in a company.

According to the eclectic theory that explains FDI,an ownership advantage is the advantage that arises from internalizing a business activity rather than leaving it to a relatively inefficient market.

A firm's subsidiary built abroad from the ground up is called a(n)________.

The ________ account within the United States' current account includes financial gains compensated to entities in other nations that is earned on assets they hold in the United States.

Which of the following is an example of a greenfield investment?

In the maturing product stage of the international product life cycle theory,increased competition creates pressures to reduce production costs.

Explain the concept of balance of payments and describe its two major components.

Discuss why a host country might promote or restrict foreign direct investment.

Which of the following is true of foreign direct investment?

Which of the following is true of a "follow the leader" scenario in the context of foreign direct investment?

Performance demands made by host countries to restrict incoming FDI apply exclusively to businesses in cultural industries.

A majority of the regulatory changes that governments around the world introduced in recent years are unfavorable to FDI.