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
Date: September 3rd, 2020
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 […]
Date: September 3rd, 2020
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 […]
Date: September 3rd, 2020
QUESTION Offshore production refers to FDI undertaken to serve the host market. Indicate whether the statement is true or false. ANSWER FALSE International trade theory tells us that home-country concerns about the negative economic effects of offshore production may be misplaced. The term offshore production refers to FDI undertaken to serve the home market.
Date: September 3rd, 2020
QUESTION Why has FDI grown more rapidly than world trade? A. The decline in trade barriers has erased the fear of protectionist pressures. B. Executives of business firms see FDI as a way of circumventing future trade barriers. C. There has been a general shift toward radical and totalitarian political institutions. D. Privatization has made […]
Date: September 3rd, 2020
QUESTION Licensing is not a good option if the competitive advantage of a firm is based upon managerial or marketing knowledge that is embedded in the routines of the firm or the skills of its managers, and that is difficult to codify in a “book of blueprints Indicate whether the statement is true or false. […]
Date: September 3rd, 2020
QUESTION The location-specific advantages argument associated with John Dunning helps explain why firms prefer FDI to licensing or to exporting. Indicate whether the statement is true or false. ANSWER FALSE The implications of the theories of FDI for business practice are straightforward. First, the location-specific advantages argument associated with John Dunning does help explain […]
Date: September 3rd, 2020
QUESTION The WTO embraces the promotion of international trade in services. Indicate whether the statement is true or false. ANSWER TRUE The WTO embraces the promotion of international trade in services. Because many services have to be produced where they are sold, exporting is not an option. Given this, the WTO has become involved […]
Date: September 3rd, 2020
QUESTION The attractiveness of exporting increases in comparison to FDI or licensing when products have a low value-to-weight ratio. Indicate whether the statement is true or false. ANSWER FALSE The viability of an exporting strategy is often constrained by transportation costs and trade barriers. When transportation costs are added to production costs, it becomes […]
Date: September 3rd, 2020
QUESTION By placing tariffs on imported goods, governments can increase the cost of exporting relative to foreign direct investment and licensing. Indicate whether the statement is true or false. ANSWER TRUE Transportation costs aside, some firms undertake foreign direct investment as a response to actual or threatened trade barriers such as import tariffs or […]
Date: September 3rd, 2020
