Exam 8: Foreign Direct Investment

When a firm is negotiating the terms of a possible investment in a foreign country, when is its bargaining power high?

Which of the following best describes an industry composed of a limited number of large firms?

Which of the following specifically reduces the viability of an exporting strategy specifically for products with low value-to-weight ratios?

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

Discuss an example that substantiates Dunning's argument about location-specific advantages.

When a firm is considering FDI, what are the some of the negotiating points it must weigh before making its decision?

Discuss the benefits and costs of FDI from the perspective of a host country and from the perspective of the home country.

What is the term that describes when two or more enterprises encounter each other in different regional markets, national markets, or industries?

A country rejects FDI proposals in certain industries. It does so because the tangible advantages of such investments are lesser than potential costs like loss of employment and reduction of overall well-being. However, it aggressively pursues inviting foreign investments in sectors like infrastructure, education, and healthcare because of the benefits that accrue with them. Which political view of FDI is discussed in this example?

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

_____ is essentially the service-industry version of licensing, although it normally involves much longer term commitments.

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

What is licensing? How does it work?

Other things being equal, the greater the capital investment in an economy, the more favorable its future growth prospects are likely to be.

The _____ of FDI refers to the amount of FDI undertaken over a year.

A French wind power company gives an Indonesian company the right to produce and sell wind turbines in return for a royalty fee on every unit sold. Which business practice is this an example of?

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

Why is it said that not all the new jobs created by FDI represent net additions in employment?

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.

The majority of cross-border investment in the developed world is in the form of greenfield investments rather than mergers and acquisitions.