A) consolidation
B) greenfield investment
C) acquisition
D) licensing agreement
E) mass customization
G) A) and B)
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The benefits of FDI to the home (source)...View Answer
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A) rise of communism in Eastern Europe
B) generally steady economic growth of those countries that embraced the radical position
C) growing belief in many countries that FDI leads to loss of jobs
D) strong economic performance of those developing countries that embraced capitalism
E) collapse of capitalism in the newly independent nations of Asia
G) D) and E)
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A) The flow of FDI refers to the total accumulated value of foreign-owned assets at a given time.
B) FDI has grown more rapidly than world trade and world output.
C) The general shift toward democratic political institutions has discouraged FDI.
D) Generally,free market economies oppose FDI.
E) The globalization of the world economy is having a negative effect on the volume of FDI.
G) C) and E)
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A) lack of funds
B) risk of transaction loss
C) poor strategic tie-ups
D) risks of expropriation
E) losses due to natural calamities
G) C) and D)
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A) One aspect of pragmatic nationalism is the tendency to aggressively court FDI believed to be in the national interest by,for example,offering subsidies to foreign MNEs in the form of tax breaks or grants.
B) The pragmatic nationalist view states that FDI always has a positive effect on the balance of payments which arises from the outflow of a foreign subsidiary's earnings and from the import of inputs from abroad.
C) According to the pragmatic nationalist view,international production should be distributed among countries based on the theory of comparative advantage.
D) According to the pragmatic nationalist view,FDI should not be allowed to enter into a country because its costs always outweigh its benefits.
E) The pragmatic nationalist view of FDI accepts the Marxist theory,and suggests that FDI by MNEs is an instrument of imperialism.
G) A) and B)
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A) trade wars.
B) a decrease in the supply.
C) imitative behavior.
D) higher demand.
E) increased domestic consumption.
G) B) and C)
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A) outsourcing.
B) licensing.
C) franchising.
D) exporting.
E) diversifying.
G) None of the above
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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 recipients of inward FDI.
D) There has been an increase in the importance of China as a recipient of FDI.
E) Latin America is the least important region in the developing world for FDI inflows.
G) A) and C)
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A) to focus on extractive industries,such as oil and gas.
B) to serve the home market.
C) in shipping industries.
D) to decrease the prices of products in the host countries.
E) to capture tax benefits in the host country.
G) A) and E)
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Until the 1990s,there was no consistent ...View Answer
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A) balance-of-payments and employment effects of outward FDI.
B) technology capture effect and the perceived loss of national sovereignty.
C) reverse-resource transfer effect and the exposure to foreign markets caused by FDI.
D) import of substantial input from abroad and being held to "economic ransom."
E) exposure to foreign markets and the decreased costs of production.
G) C) and D)
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A) It drives down prices and increases the economic welfare of consumers.
B) It raises unemployment levels.
C) It causes firms to fight for scarce capital investments.
D) It leads to an oligopolistic market and unfair pricing.
E) It leads to decreased productivity,product and process innovations,and lesser economic growth.
G) B) and E)
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A) comparative advantage theory.
B) distribution theory.
C) new trade theory.
D) internalization theory.
E) licensing theory.
G) A) and B)
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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 economists favor imitative theory as an explanation for FDI.
D) no important aspect of FDI is explained by imitative theory.
E) internalization theory addresses the issue of efficiency of FDI over exporting or licensing.
G) C) and D)
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Virtually all investor countries,includi...View Answer
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B) False
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B) False
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A) free trade agreements.
B) inward FDI.
C) sovereignty.
D) balance-of-payments position.
E) gold reserves.
G) A) and E)
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A) high local content requirement.
B) low total landed cost.
C) low value-to-weight ratio.
D) low licensing tariff.
E) high marginal cost.
G) A) and B)
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