Question 1

The two most common methods of restricting inward FDI are ownership restraints and performance requirements.

Accepted Answer

A) True 
 B)False

Question 2

Describe some of the home country policies that encourage outward FDI.

Accepted Answer

Many investor nations now have governmen

Question 3

When a company brings capital and/or technology to a host country, the host country benefits from the:

Accepted Answer

A)  political effect of FDI. 
B)  resource-transfer effect of FDI. 
C)  balance-of-payments effect of FDI. 
D)  bandwagon effect of FDI. 
A)  political effect of FDI. 
B)  resource-transfer effect of FDI. 
C)  balance-of-payments effect of FDI. 
D)  bandwagon effect of FDI.

Question 4

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

Accepted Answer

A)  Increased regulation 
B)  Increased consumer welfare 
C)  Imitative behavior 
D)  Longer product life-cycles 
A)  Increased regulation 
B)  Increased consumer welfare 
C)  Imitative behavior 
D)  Longer product life-cycles

Question 5

John Dunning pioneered the eclectic paradigm.

Accepted Answer

A) True 
 B)False

Question 6

What are location-specific advantages? How do they help explain FDI?

Accepted Answer

Location-specific advantages are advanta

Question 7

What is a greenfield investment? How does it compare to an acquisition? Which form of FDI is a firm more likely choose? Explain your answer.

Accepted Answer

FDI can take the form of a greenfield in

Question 8

Which of the following is a home-country policy aimed at limiting outward FDI flow?

Accepted Answer

A)  Taxing domestic companies' foreign earnings at a higher rate than their domestic earnings 
B)  Implementation of government-backed insurance programs to cover major types of foreign investment risk 
C)  Eliminating double taxation of foreign income 
D)  Persuading host countries to relax their restrictions on inbound FDI 
A)  Taxing domestic companies' foreign earnings at a higher rate than their domestic earnings 
B)  Implementation of government-backed insurance programs to cover major types of foreign investment risk 
C)  Eliminating double taxation of foreign income 
D)  Persuading host countries to relax their restrictions on inbound FDI

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

The free market view argues that FDI is a benefit to both the source country and to the host country.

Accepted Answer

A) True 
 B)False

Question 11

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

Accepted Answer

A)  product life-cycle theory 
B)  internalization theory 
C)  multipoint competition theory 
D)  eclectic paradigm 
A)  product life-cycle theory 
B)  internalization theory 
C)  multipoint competition theory 
D)  eclectic paradigm

Question 12

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

Accepted Answer

A)  Its unstable economy 
B)  Its unfavorable political environment 
C)  Its wealthy domestic markets 
D)  Its closed society 
A)  Its unstable economy 
B)  Its unfavorable political environment 
C)  Its wealthy domestic markets 
D)  Its closed society

Question 13

A country's _____ keeps track of its payments to and its receipts from other countries.

Accepted Answer

A)  federal payments ledgers 
B)  concurrent accounts 
C)  checks-and-balances accounts 
D)  balance-of-payments accounts 
A)  federal payments ledgers 
B)  concurrent accounts 
C)  checks-and-balances accounts 
D)  balance-of-payments accounts

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

What is multipoint competition? How do firms respond to multipoint competition?

Accepted Answer

Multipoint competition arises when two o

Question 16

According to Knickerbocker's theory:

Accepted Answer

A)  when a firm has valuable know-how that cannot be adequately protected by a licensing contract it engages in FDI. 
B)  when a firm's skills and know-how are not amenable to licensing, it usually prefers the FDI route. 
C)  by placing tariffs on imported goods, governments indirectly increase the cost of exporting relative to foreign direct investment and licensing. 
D)  when a firm that is part of an oligopolistic industry expands into a foreign market, other firms in the industry will be compelled to make similar investments. 
A)  when a firm has valuable know-how that cannot be adequately protected by a licensing contract it engages in FDI. 
B)  when a firm's skills and know-how are not amenable to licensing, it usually prefers the FDI route. 
C)  by placing tariffs on imported goods, governments indirectly increase the cost of exporting relative to foreign direct investment and licensing. 
D)  when a firm that is part of an oligopolistic industry expands into a foreign market, other firms in the industry will be compelled to make similar investments.

Question 17

_____ arises when two or more enterprises encounter each other in different regional markets, national markets, or industries.

Accepted Answer

A)  Horizontal integration 
B)  Multipoint competition 
C)  An oligopoly 
D)  Vertical integration 
A)  Horizontal integration 
B)  Multipoint competition 
C)  An oligopoly 
D)  Vertical integration

Question 18

Licensing would be a good option for firms in which of the following industries?

Accepted Answer

A)  High-technology industries in which protecting firm-specific expertise is of paramount importance. 
B)  Global oligopolies, in which competitive interdependence requires that multinational firms maintain tight control over foreign operations. 
C)  Industries in which intense cost pressures require that multinational firms maintain tight control over foreign operations. 
D)  In fragmented, low-technology industries in which globally dispersed manufacturing is not an option. 
A)  High-technology industries in which protecting firm-specific expertise is of paramount importance. 
B)  Global oligopolies, in which competitive interdependence requires that multinational firms maintain tight control over foreign operations. 
C)  Industries in which intense cost pressures require that multinational firms maintain tight control over foreign operations. 
D)  In fragmented, low-technology industries in which globally dispersed manufacturing is not an option.

Question 19

Discuss the pragmatic nationalist view toward FDI.

Accepted Answer

The pragmatic nationalist view is that F

Question 20

Recent years have seen a marked increase in the number of countries that adhere to a radical ideology regarding FDI.

Accepted Answer

A) True 
 B)False

The two most common methods of restricting inward FDI are ownership restraints and performance requirements.

Describe some of the home country policies that encourage outward FDI.

When a company brings capital and/or technology to a host country, the host country benefits from the:

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

John Dunning pioneered the eclectic paradigm.

What are location-specific advantages? How do they help explain FDI?

What is a greenfield investment? How does it compare to an acquisition? Which form of FDI is a firm more likely choose? Explain your answer.

Which of the following is a home-country policy aimed at limiting outward FDI flow?

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

The free market view argues that FDI is a benefit to both the source country and to the host country.

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

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

A country's _____ keeps track of its payments to and its receipts from other countries.

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

What is multipoint competition? How do firms respond to multipoint competition?

According to Knickerbocker's theory:

_____ arises when two or more enterprises encounter each other in different regional markets, national markets, or industries.

Licensing would be a good option for firms in which of the following industries?

Discuss the pragmatic nationalist view toward FDI.

Recent years have seen a marked increase in the number of countries that adhere to a radical ideology regarding FDI.

Globalization

National Differences in Political Economy

Political Economy and Economic Development

Differences in Culture

Ethics in International Business

International Trade Theory

The Political Economy of International Trade

Regional Economic Integration

The Foreign Exchange Market

The International Monetary System

The Global Capital Market

The Strategy of International Business

The Organization of International Business

Entry Strategy and Strategic Alliances

Exporting, Importing, and Countertrade

Global Production, Outsourcing, and Logistics

Global Marketing and RD

Global Human Resource Management

Accounting and Finance in the International Business

Filters

Exam 8: Foreign Direct Investment

The two most common methods of restricting inward FDI are ownership restraints and performance requirements.

Describe some of the home country policies that encourage outward FDI.

When a company brings capital and/or technology to a host country, the host country benefits from the:

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

John Dunning pioneered the eclectic paradigm.

What are location-specific advantages? How do they help explain FDI?

What is a greenfield investment? How does it compare to an acquisition? Which form of FDI is a firm more likely choose? Explain your answer.

Which of the following is a home-country policy aimed at limiting outward FDI flow?

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

The free market view argues that FDI is a benefit to both the source country and to the host country.

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

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

A country's _____ keeps track of its payments to and its receipts from other countries.

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

What is multipoint competition? How do firms respond to multipoint competition?

According to Knickerbocker's theory:

_____ arises when two or more enterprises encounter each other in different regional markets, national markets, or industries.

Licensing would be a good option for firms in which of the following industries?

Discuss the pragmatic nationalist view toward FDI.

Recent years have seen a marked increase in the number of countries that adhere to a radical ideology regarding FDI.

Globalization

National Differences in Political Economy

Political Economy and Economic Development

Differences in Culture

Ethics in International Business

International Trade Theory

The Political Economy of International Trade

Regional Economic Integration

The Foreign Exchange Market

The International Monetary System

The Global Capital Market

The Strategy of International Business

The Organization of International Business

Entry Strategy and Strategic Alliances

Exporting, Importing, and Countertrade

Global Production, Outsourcing, and Logistics

Global Marketing and RD

Global Human Resource Management

Accounting and Finance in the International Business

Filters