Exam 8: Foreign Direct Investment

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?

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

Discuss the two main forms of FDI.

Which of the following arises when a country is exporting more goods and services than it is importing?

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

When contemplating FDI,why do firms apparently prefer to acquire existing assets rather than undertake greenfield investments?

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

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.

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

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

FDI occurs when a firm:

What are the possible adverse effects of FDI on a host country's balance-of-payments position?

Explain John Dunning's position on FDI.What is the eclectic paradigm?

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

What is licensing? How does it work?

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

Which of the following is the prime reason why Africa has attracted FDI in recent years?

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

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

The pragmatic nationalist view highlights only the benefits of FDI.