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
QUESTION Which of the following indicates that a firm has a full outright stake in an acquisition? A. Anderson Corporations acquires at least 75 percent of a company. B. Sheffield Enterprises acquires at least 60 percent of a company. C. Arthur Enterprises acquires 98 percent of a company. D. Maximus Corporations acquires 100 percent of […]
QUESTION Once it undertakes FDI, a firm becomes a(n): A. outsourcer. B. retail chain. C. offshore company. D. multinational enterprise. E. national corporation. ANSWER D
QUESTION Services such as telecommunications, retailing, and many financial services, where the service has to be produced where it is delivered, lend themselves well to exporting. Indicate whether the statement is true or false. ANSWER FALSE FDI’s impact on competition in domestic markets may be particularly important in the case of services, such as […]
QUESTION According to the U.S. Department of Commerce, which of the following, occurs whenever a U.S. citizen, organization, or affiliated group takes an interest of 10 percent or more in a foreign business entity? A. Multilateral investment B. Foreign direct investment C. Reciprocal foreign investment D. International divestment E. Asset divestment ANSWER B
QUESTION An acquisition does not result in a net increase in the number of players in a market. Indicate whether the statement is true or false. ANSWER TRUE An acquisition does not result in a net increase in the number of players in a market; the effect on competition may be neutral. When a […]
QUESTION Which of the following refers to the amount of FDI undertaken over a given period (normally a year)? A. Portfolio B. Flow C. Status D. Stock E. Fragment ANSWER B
QUESTION The indirect employment effects of FDI are often as large as, if not larger than, the direct effects. Indicate whether the statement is true or false. ANSWER TRUE The effects of FDI on employment are both direct and indirect. Direct effects arise when a foreign MNE employs a number of host-country citizens. Indirect […]
QUESTION The stock of foreign direct investment refers to: A. the total accumulated value of foreign-owned assets at a given time. B. the number of shares of a foreign firm held by the local investors. C. the amount of FDI undertaken over a given time period (normally a year). D. the dividend amount paid by […]
