BUS187 q.8 – Flashcards

Although it normally involves much longer-term commitments, franchising is essentially the service industry version of:

The _____ of foreign direct investment refers to the amount of FDI undertaken over a given period (normally a year).

The _____ view of FDI traces its roots to Marxist political and economic theory.

The _____ view argues that international production should be distributed among countries according to the theory of comparative advantage.

Which of the following is one of the limitations of exporting that leads companies to prefer FDI over exporting?

_____ involves producing goods at home and then shipping them to the receiving country for sale.

When a country is importing more goods and services than it is exporting, it is incurring a(n):

Which of the following indicates that a firm has full outright stake in an acquisition?

QFresh, a brand for energy drinks launched a healthy lime based drink without preservatives. Immediately after this another brand, Fast Fizz, which manufactures energy drinks, also announced the launch of a new refreshing drink without preservatives. Then Ignite, a third brand of energy drinks, reduced the price of its apple based drink. Which of the following is most likely to happen in this oligopolistic market set up?

A firm becomes a(n) _____, once it undertakes FDI.

According to internalization theory, one of the drawbacks of licensing is that:

A(n) _____ arises when two or more enterprises encounter each other in different regional markets, national markets, or industries.

The United States has been an attractive target for FDI partly because of its:

Which of the following is true regarding the pragmatic nationalist view of FDI?

Direct effects of FDI on employment in the host country arise when a foreign MNE:

The most important concerns regarding the costs of FDI for the home-country center on:

Economists refer to knowledge "spillovers" that occur when companies in the same industry are located in the same area as:

As an incentive to encourage domestic firms to undertake FDI, many countries have:

To encourage inward FDI, it is increasingly common for governments to:

FDI is risky because of the problems associated with:

The tendency to aggressively court FDI believed to be in the national interest of a country is an aspect of:

Which of the following involves granting a foreign entity the right to produce and sell the firm's product in return for a royalty fee on every unit sold?

In the case of developing nations, about _____ of FDI is in the form of cross-border mergers and acquisitions.

Location-specific advantages for a firm are those that arise from:

Foreign managers trained in the latest management techniques can often help to improve the efficiency of operations in the host country, whether those operations are acquired or greenfield developments. This benefit of FDI falls into the category of _____.

Which of the following is the only way in which a current account deficit can be supported in the long run?

Offshore production refers to FDI undertaken:

According to the _____, FDI has both benefits and costs and should be allowed only if the benefits outweigh the costs.

According to the U.S. Department of Commerce, in the United States _____ occurs whenever a U.S. citizen, organization, or affiliated group takes an interest of 10 percent or more in a foreign business entity.

_____ accounts are national accounts that track both payments to and receipts from other countries.

A firm will favor FDI over exporting as an entry strategy when:

The main benefits of inward FDI for a host country arise from:

Why has FDI grown more rapidly than world trade?

Countries such as the U.S., the U.K., 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:

Which of the following statements is most likely to be true regarding the adverse effects of FDI on the host country?

The strategic behavior theory:

Mergers and acquisitions differ from greenfield investments in that:

A current account deficit is also known as a(n) _____ deficit.

Indirect effects of FDI on employment in a host country arise when:

Which of the following statements regarding the free market view is true?

Many services have to be produced where they are sold; hence _____ is not an option.

The idea behind multipoint competition is to ensure that:

Which of the following is a home-country policy for limiting outward FDI?

In the balance of payments, the _____ account records transactions involving the export and import of goods and services.

Which of the following statements is most likely to be true regarding the effects of FDI on employment?

Historically, most FDI has been directed at the _____ nations of the world.

According to the radical view of FDI, multinational enterprises (MNEs) that already exist in a country:

People with radical view toward FDI argue that _____ is an instrument of imperialist domination.

The stock of foreign direct investment refers to:

Which of the following is most likely to involve establishment of a new operation in a foreign country?

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:

The cement market in Erbia is dominated by four firms. These firms control 85 percent of selling and buying of the domestic market. Which of the following terms explains the market structure of cement industry in Erbia?

A firm is most likely to favor foreign direct investment over exporting when:

The difference between Internalization theory and imitative theory is that: