Exam 8: Foreign Direct Investment

Identify the theory that seeks to explain why firms often prefer foreign direct investment over licensing as a strategy for entering foreign markets.

A Japanese car manufacturer acquires an Italian producer of car tires. This is an example of a(n) _____.

Discuss the reasons for the growth in FDI over the last 30 years.

FDI has been declining in the last few decades because protectionist pressures have become less intense.

In which of the following situations does the internalization theory recommend FDI as opposed to licensing?

FDI undertaken to serve the home market is known as:

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

The amount of FDI undertaken over a given time period is known as the flow of FDI.

According to the pragmatic nationalistic view, the MNE is a tool for exploiting host countries to the exclusive benefit of their capitalist-imperialist home countries.

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

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

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

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

The WTO supports the promotion of international trade in services.

Which of the following factors has made the United States an attractive target for foreign direct investment?

Licensing involves the establishment of a new operation in a foreign country.

Which of the following primarily explains why developing nations are characterized by lower percentage of cross-border mergers and acquisitions compared to developed nations?

Which branch of economic theory seeks to explain why firms often prefer FDI over licensing as a strategy for entering foreign markets?

In which way can the source country's balance of payments benefit from an FDI made in a foreign country?

Which of the following is a way in which governments increase the attractiveness of FDI and licensing relative to exporting?