Exam 3: Foreign Direct Investment Theory and Application

The Thailand Government requires Thai restaurants to buy at least 50 percent of their supplies from Thailand.

_____________ is the benefit incurred to a firm that maintains a monopolistic power in the market.

MNE possesses monopolistic advantages enabling it to operate subsidiaries abroad more profitably than a local competing firm is the example of which theory?

What strategy links and integrates activities across nations in an attempt to minimize overall costs, avoid various taxes, or maximize income.

Which FDI attempts to acquire particular resources at a lower real cost than could be obtained in the home country?

According to _____ theory, the monopolistic advantages come from two sources: superior knowledge and economies of scale.

Most Japanese MNE's, for instance, begin their international expansion with _________ investment because they believe that it enables the sharing of experience, resources, and knowledge already developed at home, thus reducing risk.

The theorists for this theory argue that internalization creates "contracting" through a unified, integrated intra-firm governance structure.

Resource seeking FDI attempts to acquire particular resources at a higher cost than could be obtained in the home country.

The eclectic program offers an exclusive framework for explaining international production activities.

Dynamic capabilities refer to a firm's non-ability to diffuse, deploy, utilize, and rebuild firm-specific resources in order to attain a sustained competitive advantage.

Internalization theory advocates that the available external market does provide an efficient environment in which firm can profit.

The liability that represents the costs of doing business abroad that result in a competitive disadvantage vis-à-vis indigenous firms.

The lack of adaptation to European ways, from transportation modes to food, by the Walt Disney Company when establishing its first park in Europe, Euro Disney (since renamed Disneyland Europe) is a example of ____.

________________ occurs when a firm invests directly in production or other facilities in a foreign country over which it has effective control.

Centers of excellence are foreign units equipped with the worst practice of managing knowledge.

In most countries distribution of FDI are very even.

PepsiCo Inc., for example, invested heavily in Brazil, Argentina, and Mexico to seek out benefits resulting from economic liberalization in these economies. What term was illustrated here?

Internalization theory advocates that the available external market does not provide an efficient environment in which the firm can profit by using its technology or production resources.

Resource-seeking FDI