Question 1

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 2

Describe the situations when licensing is not a good option for a firm.

Accepted Answer

Licensing is not a good option in three

Question 3

Which of the following observations concerning Knickerbocker's theory is true?

Accepted Answer

A)  It does not explain imitative FDI behavior by firms in oligopolistic industries. 
B)  Economists favor this theory as an explanation for FDI compared to the internalization theory. 
C)  It addresses the issue of whether FDI is more efficient than exporting or licensing for expanding abroad. 
D)  It does not explain why the first firm in an oligopoly decides to undertake FDI rather than to export or license. 
A)  It does not explain imitative FDI behavior by firms in oligopolistic industries. 
B)  Economists favor this theory as an explanation for FDI compared to the internalization theory. 
C)  It addresses the issue of whether FDI is more efficient than exporting or licensing for expanding abroad. 
D)  It does not explain why the first firm in an oligopoly decides to undertake FDI rather than to export or license.

Question 4

Which of the following summarizes the total amount of resources invested in factories,stores,office buildings,and the like?

Accepted Answer

A)  Gross capital index 
B)  Gross fixed capital formation 
C)  Gross domestic product 
D)  Gross national product 
A)  Gross capital index 
B)  Gross fixed capital formation 
C)  Gross domestic product 
D)  Gross national product

Question 5

Knickerbocker's theory explains why the first firm in an oligopoly decides to undertake FDI rather than to export or license.

Accepted Answer

A) True 
 B)False

Question 6

A country's balance of payments accounts keep track of both its payments to and its receipts from other countries.

Accepted Answer

A) True 
 B)False

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is a major drawback of using the product life-cycle theory in explaining FDI?

Accepted Answer

A)  It ignores the fact that firms invest in a foreign country when demand in that country will support local production. 
B)  It does not explain why firms invest in developing countries when cost pressures become intense. 
C)  It fails to identify when it is profitable to invest abroad. 
D)  It ignores the fact that licensing as an entry strategy has its limitations. 
A)  It ignores the fact that firms invest in a foreign country when demand in that country will support local production. 
B)  It does not explain why firms invest in developing countries when cost pressures become intense. 
C)  It fails to identify when it is profitable to invest abroad. 
D)  It ignores the fact that licensing as an entry strategy has its limitations.

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

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

Accepted Answer

Location-specific advantages are advanta

Question 11

As transportation costs or trade barriers increase,exporting becomes unprofitable,compared to FDI and licensing.

Accepted Answer

A) True 
 B)False

Question 12

The product life-cycle theory and Knickerbocker's theory of horizontal FDI tend to be very useful from a business perspective because the theories are more descriptive than analytical.

Accepted Answer

A) True 
 B)False

Question 13

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.

Accepted Answer

A) True 
 B)False

Question 14

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 15

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 16

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 17

Offshore production refers to FDI undertaken to serve the host market.

Accepted Answer

A) True 
 B)False

Question 18

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

Accepted Answer

FDI has grown more rapidly than world tr

Question 19

Explain the product life-cycle theory and its connection with FDI.

Accepted Answer

The product life-cycle theory,developed

Question 20

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

According to Knickerbocker's theory:

Describe the situations when licensing is not a good option for a firm.

Which of the following observations concerning Knickerbocker's theory is true?

Which of the following summarizes the total amount of resources invested in factories,stores,office buildings,and the like?

Knickerbocker's theory explains why the first firm in an oligopoly decides to undertake FDI rather than to export or license.

A country's balance of payments accounts keep track of both its payments to and its receipts from other countries.

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

Which of the following is a major drawback of using the product life-cycle theory in explaining FDI?

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

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

As transportation costs or trade barriers increase,exporting becomes unprofitable,compared to FDI and licensing.

The product life-cycle theory and Knickerbocker's theory of horizontal FDI tend to be very useful from a business perspective because the theories are more descriptive than analytical.

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

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.

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

Offshore production refers to FDI undertaken to serve the host market.

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

Explain the product life-cycle theory and its connection with FDI.

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

Globalization

National Differences in Political Economy, and Legal Systems

National Differences in Economic Development

Differences in Culture

Ethics, corporate Social Responsibility, and Sustainability

International Trade Theory

Government Policy and International Trade

Regional Trade Pacts Give the Mexican Auto Industry an Edge

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 and Supply Chain Management

Global Marketing and Rd

Global Human Resource Management

Accounting and Finance in the International Business

Filters

Exam 8: Foreign Direct Investment

According to Knickerbocker's theory:

Describe the situations when licensing is not a good option for a firm.

Which of the following observations concerning Knickerbocker's theory is true?

Which of the following summarizes the total amount of resources invested in factories,stores,office buildings,and the like?

Knickerbocker's theory explains why the first firm in an oligopoly decides to undertake FDI rather than to export or license.

A country's balance of payments accounts keep track of both its payments to and its receipts from other countries.

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

Which of the following is a major drawback of using the product life-cycle theory in explaining FDI?

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

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

As transportation costs or trade barriers increase,exporting becomes unprofitable,compared to FDI and licensing.

The product life-cycle theory and Knickerbocker's theory of horizontal FDI tend to be very useful from a business perspective because the theories are more descriptive than analytical.

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

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.

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

Offshore production refers to FDI undertaken to serve the host market.

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

Explain the product life-cycle theory and its connection with FDI.

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

Globalization

National Differences in Political Economy, and Legal Systems

National Differences in Economic Development

Differences in Culture

Ethics, corporate Social Responsibility, and Sustainability

International Trade Theory

Government Policy and International Trade

Regional Trade Pacts Give the Mexican Auto Industry an Edge

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 and Supply Chain Management

Global Marketing and Rd

Global Human Resource Management

Accounting and Finance in the International Business

Filters