QUESTION Which of the following concepts helps explain how location factors affect the direction of FDI? A. The eclectic paradigm B. The protectionism argument C. The product life-cycle theory D. The new trade theory E. The infant industry argument ANSWER A
Date: September 3rd, 2020
QUESTION The difference between Internalization theory and imitative theory is that: A. internalization theory does not explain why the first firm in an oligopoly decides to undertake FDI rather than to export or license. B. imitative theory addresses the issue of whether FDI is more efficient than exporting or licensing for expanding abroad. C. most […]
Date: September 3rd, 2020
QUESTION Location-specific advantages for a firm are those that arise from: A. acquiring the home markets of foreign firms that threaten a firm’s domestic market. B. gaining a commanding position in one market and using them to subsidize competitive attacks in other markets. C. preferring exporting over licensing in order to retain control over know-how, […]
Date: September 3rd, 2020
QUESTION The idea behind multipoint competition is to ensure that: A. a rival does not dominate one market and use the profits from there to drive competitive attacks elsewhere. B. the competitors cooperate with each other to establish a cartel. C. no other competitors can enter the market unless they resort to licensing or franchising […]
Date: September 3rd, 2020
QUESTION Silicon Valley in California is the world center for the computer and semiconductor industry and has many of the world’s major computer and semiconductor companies located close to each other, thus offering the location-specific advantage of: A. a multipoint competition. B. an oligopoly. C. a first mover. D. externalities. E. free riders. ANSWER […]
Date: September 3rd, 2020
QUESTION Dunning’s theory helps explain: A. how firms try to match each other’s moves in different markets to try to hold each other in check. B. the interdependence between firms in an oligopoly that leads to imitative behavior among the rivals. C. why a greenfield investment in a new facility is better than an acquisition […]
Date: September 3rd, 2020
QUESTION Which of the following is true about Dunning’s arguments? A. Dunning rejects the argument of internalization theory that it is difficult for a firm to license its own unique capabilities and know-how. B. Dunning suggests that to exploit foreign resources, such as oil and other minerals, a firm must undertake licensing rather than FDI. […]
Date: September 3rd, 2020
QUESTION Which view of FDI traces its roots to Marxist political and economic theory? A. Radical B. Free market C. Pragmatic nationalism D. Comparative advantage E. Pluralist ANSWER A
Date: September 3rd, 2020
QUESTION According to internalization theory, one of the drawbacks of licensing is that: A. it may result in a firm’s technological know-how being restricted to a limited knowledge base and stifles any future development. B. it does not give a firm the tight control over manufacturing, marketing, and strategy in a foreign country that may […]
Date: September 3rd, 2020
QUESTION Radical writers argue that: A. a multinational enterprise (MNE) is an instrument of economic development rather than economic domination. B. MNEs are more beneficial to host countries than to their home countries. C. important jobs in the foreign subsidiaries of MNEs go to host-country nationals rather than to citizens of the home country. D. […]
Date: September 3rd, 2020
