QUESTION Countries such as the United States, the United Kingdom, France, Germany, the Netherlands, and Japan dominate in the share of total global stock of FDI and FDI outflows and in rankings of the world’s largest multinationals because they: A. were the most developed countries postwar and home to the largest and best capitalized enterprises. […]
QUESTION The market imperfections approach seeks to explain: A. the disadvantages associated with the adoption of a completely free market view. B. why different nations import goods from other countries even when they are more capable of producing them efficiently. C. the preference for FDI over licensing by firms as a strategy to enter foreign […]
QUESTION The United States has been an attractive target for FDI partly because of its: A. abundance of cheap and skilled labor. B. stable and dynamic economy. C. commitment to environmental issues. D. low corporate tax rates. E. high trade barriers. ANSWER B
QUESTION The strategic behavior theory: A. explains the constraints of exporting and licensing. B. seeks to explain the challenges faced by a firm during the establishment of a new operation in a foreign country. C. seeks to explain the patterns of FDI flows based on the idea that FDI flows are a reflection of strategic […]
QUESTION Which of the following is true regarding the inflow of FDI? A. Even though developing nations still account for the largest share of FDI inflows, FDI into developed nations has increased markedly. B. Africa has historically been the largest recipient of inward FDI. C. The United Kingdom and France have historically been the smallest […]
QUESTION Which of the following involves producing goods at home and then shipping them to the receiving country for sale? A. Outsourcing B. Licensing C. Franchising D. Exporting E. Diversifying ANSWER D
QUESTION Which of the following states that combining location-specific assets or resource endowments and the firm’s own unique assets often requires FDI, and it also requires the firm to establish production facilities where those foreign assets or resource endowments are located? A. Strategic trade policy B. Integration approach C. Scramble theory D. Eclectic paradigm E. […]
QUESTION FDI is risky because of the problems associated with: A. sharing a valuable technological know-how with a potential competitor. B. an increase in transportation costs, especially for those products that have a low value-to-weight ratio. C. doing business in a different culture where the rules of the game may be very different. D. the […]
QUESTION Despite the move toward a free market stance in recent years, many countries still have a rather pragmatic stance toward FDI. Indicate whether the statement is true or false. ANSWER TRUE Despite the move toward a free market stance in recent years, many countries still have a rather pragmatic stance toward FDI. In […]
QUESTION Which of the following is most likely to involve establishment of a new operation in a foreign country? A. Consolidation B. Greenfield investment C. Acquisition D. Licensing agreement E. Mass customization ANSWER B
