Exam 6: Investing Abroad Directly

Most countries embrace the free market view on FDI.

OLI advantages refer to the advantages of ownership (O),location (L),and internalization (I)that come from engaging in foreign direct investment.

When market failure is minimized through internalization,_____.

_____ is the amount of foreign direct investment (FDI)moving in a given period (usually a year)in a certain direction.

In the long run,the interests of multinational enterprises (MNEs)in host countries can be best safeguarded if MNEs neglect the interests of host countries.

Citronix Inc.is a semiconductor manufacturing company with its headquarters in Bigania.In its venture to expand business,the company sets up manufacturing units in five other countries where semiconductors are produced and manufactured.In this scenario,Citronix Inc.is engaged in _____.

Hisson Technologies,a computer manufacturing company headquartered in Lumberne,had recently undertaken foreign direct investment (FDI)by setting up its office in the Remfur Republic.The company did not engage in computer distribution in Lumberne,but it invested in computer dealership in the Remfur Republic.In this case,Hisson Technologies was engaged in _____.

Tacit knowledge is noncodifiable and its acquisition and transfer requires hands-on practice.

The United Nations defines FDI as an equity stake of 10% or more in a foreign-based enterprise.A lower percentage invested in a foreign firm is considered FPI.?

_____ refers to holding securities,such as stocks and bonds,of companies in countries outside one's own but does not entail the active management of foreign assets.

Home countries often reap benefits and endure costs associated with FDI that are the same as those experienced by the host countries.

Which of the following is a cost of FDI to a host country?

Sub Inc.is a sandwich company whose long time licensee operating in Brazil recently opened a direct competitor using the knowledge it gained through marketing the products of Sub Inc.This scenario represents which risk of licensing?

Bricklanes Inc.is a company that designs and manufactures materials for interior decorations.The company expands its business in Cronje Republic to gain the advantages of foreign direct investment.As a result,several companies in Cronje Republic have adopted new advancements that are introduced by Bricklanes Inc.in their processes.In this case,which of the following benefits has the host country acquired?

Foreign direct investment (FDI)results in the loss of some economic sovereignty in a host country.

_____ is defined as the possibility of unauthorized diffusion of firm-specific know-how.

Rayato Inc.is a cell phone manufacturing company headquartered in Swinland.The company designs,manufactures,and markets cell phones in Swinland.It has recently engaged in foreign direct investment (FDI),setting up its manufacturing units in three other countries.Rayato Inc.has decided to follow the same value-chain stage in the host countries as in Swinland.In this scenario,Rayato Inc.has engaged in:

Technology spillover from FDI is typically beneficial to domestic firms and industries.

Knowledge that can be written down and transferred without losing much of its richness is called _____.

HiSpark Inc.,a leading sports accessories brand,believes that it has to possess rare,hard-to-imitate technology,valuable brand name,and organizationally embedded culture to achieve consistent success as a multinational enterprise.In this case,HiSpark Inc.is focusing on: