Question 1

Firms undertake FDI at _____________ is Raymond Vernon's view of foreign direct investment.

Accepted Answer

A)  unpredictable stages in the life cycle of a product they have pioneered
B)  late stages in their corporate histories
C)  early stages in their corporate histories
D)  particular stages in the life cycle of a product they have pioneered
E)  early stages in the product life cycle of a product another company has pioneeredF) C) and D)
G) C) and E)

Question 2

Much foreign direct investment is undertaken as a response to actual or threatened

Accepted Answer

A)  trade barriers.
B)  economic sanctions.
C)  legal action.
D)  international appeals.
E)  market opportunitiesF) A) and D)
G) B) and C)

Question 3

McDonalds has expanded into foreign markets primarily through

Accepted Answer

A)  franchising.
B)  licensing.
C)  FDI.
D)  exporting.
E)  turn-keyF) A) and C)
G) C) and E)

Question 4

Because of the problems associated with doing business in a different culture where the "rules of the game" may be very different, FDI is risky.

Accepted Answer

A) True 
 B)False

Question 5

When ________________, a firm will favor FDI over exporting as an entry strategy, according to the textbook.

Accepted Answer

A)  interest rates or government policy make exporting unattractive
B)  transportation costs or trade barriers make exporting unattractive
C)  cultural barriers or trade barriers make exporting unattractive
D)  cultural barriers or government policy make exporting unattractive
E)  internalization theory is not applicableF) B) and D)
G) A) and B)

Question 6

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

Accepted Answer

A)  exporting.
B)  licensing.
C)  FDI.
D)  turnkey projects.
E)  business system transferF) B) and E)
G) A) and C)

Question 7

The eclectic paradigm has come under sharp criticism by British economist John Dunning.

Accepted Answer

A) True 
 B)False

Question 8

There has been a rapid decrease in the total volume of FDI over the past 20 years.

Accepted Answer

A) True 
 B)False

Question 9

Thirty years ago, Starbucks was a single store.Today, it is a global roaster and retailer of coffee with more than 875 stores located in Japan.

Accepted Answer

A) True 
 B)False

Question 10

If Siemens, a German firms, purchased a 20% interest in a manufacturing firm in Canada, Siemens would be engaging in

Accepted Answer

A)  foreign direct investment.
B)  global entrepreneurship.
C)  cross-boarder international investment.
D)  multinational investment.
E)  minority interest acquisitionF) A) and B)
G) All of the above

Question 11

What is meant by the term Foreign Direct Investment? Describe the difference between the flow of foreign direct investment and the stock of foreign direct investment.

Accepted Answer

Foreign direct investment (FDI) occurs w...

Question 12

Historically, most FDI has been directed at ______________?

Accepted Answer

A)  developed nations
B)  developing nations
C)  China
D)  India
E)  the Middle EastF) B) and D)
G) A) and D)

Question 13

Silicon Valley has a ______________ in the generation of knowledge related to the computer and semi-conductor industries, when looked at by Dunning's theory.

Accepted Answer

A)  demographic specific advantage
B)  trade specific advantage
C)  location specific advantage
D)  null advantage
E)  critical mass advantageF) A) and B)
G) A) and C)

Question 14

The eclectic paradigm is a theory of FDI that combines two other perspectives into a single holistic explanation of FDI.

Accepted Answer

A) True 
 B)False

Question 15

Granting a foreign entity the right to produce and sell the firm's product in return for a royalty fee on every unit the foreign entity sells is called FDI.

Accepted Answer

A) True 
 B)False

Question 16

A traditional criticism among Canadian nationalists of inward FDI is that we will become a branch plant economy.Branch plants are a foreign subsidiary of a multinational parent corporation.Branch plants, usually of United States corporations, are common in the Canada.Canadian nationalists claim that they have helped to obstruct the growth of a Canadian economy that is independent of other countries interests and self-directed.However, some Canadian economists argue that they are been an important factor in stimulating our economy and supporting our standard of living.What is your position? Explain.

Accepted Answer

The student could agree with the nationa...

Question 17

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?

Accepted Answer

A)  Franchising
B)  Exporting
C)  Licensing
D)  Foreign Direct Investment
E)  MergerF) C) and D)
G) All of the above

Question 18

According to the textbook, FDI is expensive because

Accepted Answer

A)  a firm must pay a high franchising fee to participate in foreign direct investment in most countries.
B)  a firm must pay the transportation costs to ship domestically produced products overseas.
C)  a firm must establish production facilities in a foreign country or acquire a foreign enterprise.
D)  a firm must pay a high licensing fee to participate in foreign direct investment in most countries.
E)  a firm must pay taxes in both countriesF) B) and D)
G) B) and E)

Question 19

Radical writers believe that _____________ extract profits from the host country and take them to their home country, giving nothing of value to the host country in exchange.

Accepted Answer

A)  FDI
B)  MNEs
C)  SNEs
D)  PNCs
E)  MNCsF) B) and E)
G) B) and D)

Question 20

Regarding the costs of FDI for the home country, the most important concerns center around:

Accepted Answer

A)  the balance-of-payments and employment effects of outward FDI
B)  the technology capture effect and the perceived loss of national sovereignty
C)  the resource transfer effect and the inflationary pressures caused by FDI
D)  the perceived loss of national sovereignty and inflationary pressures caused by FDI
E)  the technology transfer loss and increased competitionF) A) and E)
G) All of the above

Exam 7: Foreign Direct Investment

Radical writers believe that _____________ extract profits from the host country and take them to their home country, giving nothing of value to the host country in exchange.

Correct Answer
verified

Correct Answer
verified
The student could agree with the nationa...
View Answer

What is meant by the term Foreign Direct Investment? Describe the difference between the flow of foreign direct investment and the stock of foreign direct investment.

Correct Answer
verified
Foreign direct investment (FDI) occurs w...
View Answer

Firms undertake FDI at _____________ is Raymond Vernon's view of foreign direct investment.

Correct Answer
verified

The eclectic paradigm is a theory of FDI that combines two other perspectives into a single holistic explanation of FDI.

Correct Answer
verified

Historically, most FDI has been directed at ______________?

Correct Answer
verified

Because of the problems associated with doing business in a different culture where the "rules of the game" may be very different, FDI is risky.

Correct Answer
verified

According to the textbook, FDI is expensive because

Correct Answer
verified

Regarding the costs of FDI for the home country, the most important concerns center around:

Correct Answer
verified

When ________________, a firm will favor FDI over exporting as an entry strategy, according to the textbook.

Correct Answer
verified

Granting a foreign entity the right to produce and sell the firm's product in return for a royalty fee on every unit the foreign entity sells is called FDI.

Correct Answer
verified

If Siemens, a German firms, purchased a 20% interest in a manufacturing firm in Canada, Siemens would be engaging in

Correct Answer
verified

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

Correct Answer
verified

Much foreign direct investment is undertaken as a response to actual or threatened

Correct Answer
verified

Silicon Valley has a ______________ in the generation of knowledge related to the computer and semi-conductor industries, when looked at by Dunning's theory.

Correct Answer
verified

The eclectic paradigm has come under sharp criticism by British economist John Dunning.

Correct Answer
verified

There has been a rapid decrease in the total volume of FDI over the past 20 years.

Correct Answer
verified

Thirty years ago, Starbucks was a single store.Today, it is a global roaster and retailer of coffee with more than 875 stores located in Japan.

Correct Answer
verified

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?

Correct Answer
verified

McDonalds has expanded into foreign markets primarily through

Correct Answer
verified

Exam 7: Foreign Direct Investment

Radical writers believe that _____________ extract profits from the host country and take them to their home country, giving nothing of value to the host country in exchange.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedThe student could agree with the nationa...View AnswerShow Answer

What is meant by the term Foreign Direct Investment? Describe the difference between the flow of foreign direct investment and the stock of foreign direct investment.

Correct AnswerverifiedForeign direct investment (FDI) occurs w...View AnswerShow Answer

Firms undertake FDI at _____________ is Raymond Vernon's view of foreign direct investment.

Correct AnswerverifiedShow Answer

The eclectic paradigm is a theory of FDI that combines two other perspectives into a single holistic explanation of FDI.

Correct AnswerverifiedShow Answer

Historically, most FDI has been directed at ______________?

Correct AnswerverifiedShow Answer

Because of the problems associated with doing business in a different culture where the "rules of the game" may be very different, FDI is risky.

Correct AnswerverifiedShow Answer

According to the textbook, FDI is expensive because

Correct AnswerverifiedShow Answer

Regarding the costs of FDI for the home country, the most important concerns center around:

Correct AnswerverifiedShow Answer

When ________________, a firm will favor FDI over exporting as an entry strategy, according to the textbook.

Correct AnswerverifiedShow Answer

Granting a foreign entity the right to produce and sell the firm's product in return for a royalty fee on every unit the foreign entity sells is called FDI.

Correct AnswerverifiedShow Answer

If Siemens, a German firms, purchased a 20% interest in a manufacturing firm in Canada, Siemens would be engaging in

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Much foreign direct investment is undertaken as a response to actual or threatened

Correct AnswerverifiedShow Answer

Silicon Valley has a ______________ in the generation of knowledge related to the computer and semi-conductor industries, when looked at by Dunning's theory.

Correct AnswerverifiedShow Answer

The eclectic paradigm has come under sharp criticism by British economist John Dunning.

Correct AnswerverifiedShow Answer

There has been a rapid decrease in the total volume of FDI over the past 20 years.

Correct AnswerverifiedShow Answer

Thirty years ago, Starbucks was a single store.Today, it is a global roaster and retailer of coffee with more than 875 stores located in Japan.

Correct AnswerverifiedShow Answer

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?

Correct AnswerverifiedShow Answer

McDonalds has expanded into foreign markets primarily through

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified
The student could agree with the nationa...
View Answer

Correct Answer
verified
Foreign direct investment (FDI) occurs w...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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