Question 1

Which of the following is an example of a greenfield investment?

Accepted Answer

A)  A Chinese sugar maker setting up a sugar crushing facility in Cuba. 
B)  A Serbian automobile company purchasing a Croatian component manufacturer. 
C)  A Finnish mobile phone manufacturer expanding its production facility in Finland. 
D)  An Indian oil exploration company acquiring an oil refining company. 
A)  A Chinese sugar maker setting up a sugar crushing facility in Cuba. 
B)  A Serbian automobile company purchasing a Croatian component manufacturer. 
C)  A Finnish mobile phone manufacturer expanding its production facility in Finland. 
D)  An Indian oil exploration company acquiring an oil refining company.

Question 2

In general,FDI in the form of greenfield investments should increase competition.

Accepted Answer

A) True 
 B)False

Question 3

The WTO supports the promotion of international trade in services.

Accepted Answer

A) True 
 B)False

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

A)  Internalization theory 
B)  Product life-cycle theory 
C)  Perfect markets theory 
D)  Random walk theory 
A)  Internalization theory 
B)  Product life-cycle theory 
C)  Perfect markets theory 
D)  Random walk theory

Question 6

Advantages that arise from using resource endowments or assets that are tied to a particular place and that a firm finds valuable to combine with its own unique assets are known as:

Accepted Answer

A)  location-specific advantages. 
B)  capital-specific advantages. 
C)  absolute advantages. 
D)  production factor advantages. 
A)  location-specific advantages. 
B)  capital-specific advantages. 
C)  absolute advantages. 
D)  production factor advantages.

Question 7

An aspect of pragmatic nationalism is the tendency to aggressively court FDI believed to be in the national interest by,for example,offering subsidies to foreign MNEs in the form of tax breaks or grants.

Accepted Answer

A) True 
 B)False

Question 8

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 9

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

Accepted Answer

A) True 
 B)False

Question 10

Mergers and acquisitions are quicker to execute than greenfield investments.

Accepted Answer

A) True 
 B)False

Question 11

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

Accepted Answer

Many investor nations now have governmen

Question 12

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 13

Licensing gives a firm tight control over manufacturing,marketing,and strategy in a foreign country that may be required to maximize its profitability.

Accepted Answer

A) True 
 B)False

Question 14

What are the ways in which host governments restrict inward FDI?

Accepted Answer

Host governments use a wide range of con

Question 15

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

Accepted Answer

Location-specific advantages are advanta

Question 16

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 17

Which of the following observations was made by Raymond Vernon?

Accepted Answer

A)  Firms undertake FDI at particular stages in the life cycle of a product they have pioneered. 
B)  Firms will favor exporting over FDI as an entry strategy when trade barriers are high. 
C)  FDI is prompted by imitative behavior in oligopolistic industries. 
D)  Impediments to the sale of know-how increase the profitability of FDI relative to licensing. 
A)  Firms undertake FDI at particular stages in the life cycle of a product they have pioneered. 
B)  Firms will favor exporting over FDI as an entry strategy when trade barriers are high. 
C)  FDI is prompted by imitative behavior in oligopolistic industries. 
D)  Impediments to the sale of know-how increase the profitability of FDI relative to licensing.

Question 18

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 19

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 20

What is an oligopoly? Discuss the impact of interdependence in an oligopoly.

Accepted Answer

An oligopoly is an industry composed of

Which of the following is an example of a greenfield investment?

In general,FDI in the form of greenfield investments should increase competition.

The WTO supports the promotion of international trade in services.

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

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

Advantages that arise from using resource endowments or assets that are tied to a particular place and that a firm finds valuable to combine with its own unique assets are known as:

An aspect of pragmatic nationalism is the tendency to aggressively court FDI believed to be in the national interest by,for example,offering subsidies to foreign MNEs in the form of tax breaks or grants.

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

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

Mergers and acquisitions are quicker to execute than greenfield investments.

Describe some of the home country policies that encourage outward 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.

Licensing gives a firm tight control over manufacturing,marketing,and strategy in a foreign country that may be required to maximize its profitability.

What are the ways in which host governments restrict inward FDI?

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

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

Which of the following observations was made by Raymond Vernon?

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.

What is an oligopoly? Discuss the impact of interdependence in an oligopoly.

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

Which of the following is an example of a greenfield investment?

In general,FDI in the form of greenfield investments should increase competition.

The WTO supports the promotion of international trade in services.

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

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

Advantages that arise from using resource endowments or assets that are tied to a particular place and that a firm finds valuable to combine with its own unique assets are known as:

An aspect of pragmatic nationalism is the tendency to aggressively court FDI believed to be in the national interest by,for example,offering subsidies to foreign MNEs in the form of tax breaks or grants.

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

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

Mergers and acquisitions are quicker to execute than greenfield investments.

Describe some of the home country policies that encourage outward 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.

Licensing gives a firm tight control over manufacturing,marketing,and strategy in a foreign country that may be required to maximize its profitability.

What are the ways in which host governments restrict inward FDI?

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

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

Which of the following observations was made by Raymond Vernon?

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.

What is an oligopoly? Discuss the impact of interdependence in an oligopoly.

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