Exam 6: Investing Abroad Directly

FDI stock refers to the accumulation of inbound FDI in a country or outbound FDI from a country.

Identify the benefits and costs of FDI to home countries.

Horizontal FDI refers to the amount of FDI moving out of a country in a year.

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

Which of the following political views treats FDI as an instrument of imperialism and as a vehicle for exploitation of domestic resources by foreign capitalists and firms?

_____ refers to the replacement of cross-border markets with one firm locating in two or more countries.

Which of the following statements best describes an FDI?

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.

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

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.

Oligopoly happens when an industry is dominated by one company.

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

Which of the following economic perspectives on FDI has its principles rooted in Marxism?

Internalization can help reduce opportunistic behavior in international trade.

_____ refers to international transactions between two subsidiaries in two countries controlled by the same MNE.

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

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

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

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

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