Exam 14: Foreign Direct Investment and Collaborative Ventures

During his presentation, Mario describes how a large Japanese automaker built a factory in Kentucky. Which of the following topics was most likely assigned to Group C?

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(Multiple Choice)

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Question 1

Correct Answer:

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A greenfield investment is a direct investment to purchase an existing company or facility.

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(True/False)

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Question 2

Correct Answer:

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False

Explain why MNEs prefer acquisition instead of greenfield FDI. Why do foreign governments encourage greenfield FDI?

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(Essay)

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Question 3

Correct Answer:

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Multinational enterprises may favor acquisition over greenfield FDI because, by acquiring an existing company, they gain ownership of existing assets such as plant, equipment, and human resources, as well as access to existing suppliers and customers. Unlike greenfield FDI, acquisition provides an immediate stream of revenue and accelerates the MNE's return on investment. However, host-country governments often pressure MNEs to undertake greenfield FDI. Greenfield FDI creates new jobs and production capacity, facilitates technology and know-how transfer to locals, and improves linkages to the global marketplace. Many governments offer incentives to encourage greenfield investments. They may be sufficient to offset the advantages of acquisition-based entry.

Cross-licensing agreements are a type of project-based, nonequity venture in which the partners agree to allow access to licensed intellectual property developed by the other on preferential terms.

(True/False)

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Question 4

A firm that develops the capacity to sell its products by investing in marketing and selling operations is ________.

(Multiple Choice)

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Question 5

Which of the following is a characteristic of an equity joint venture?

(Multiple Choice)

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Question 6

The complexity of the tax system is one of the factors to be considered in selecting FDI locations.

(True/False)

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Question 7

Explain the difference between vertical FDI and horizontal FDI. Provide an example that illustrates the difference between vertical and horizontal integration

(Essay)

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Question 8

In the fashion industry, customer needs change rapidly and managers often locate factories or assembly operations near important customers.

(True/False)

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Question 9

The challenges faced due to FDI are the same all over the world.

(True/False)

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Question 10

The existence of a substantial market motivates many firms to produce offerings at or near customer locations.

(True/False)

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Question 11

New markets, new resources, and improved efficiency are the three main motives for firms to enter foreign markets through FDI.

(True/False)

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Question 12

Discuss four strategies that managers can employ in order to increase the chances of a successful collaborative venture.

(Essay)

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Question 13

While franchising facilitates rapid internationalization, compared to FDI, it affords the firm less control over its foreign operations.

(True/False)

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Question 14

Foreign direct investment is the least risky entry strategy.

(True/False)

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Question 15

Project-based, nonequity ventures are difficult to set up.

(True/False)

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Question 16

A form of collaboration between two firms to form a new, jointly owned enterprise is defined as a joint venture.

(True/False)

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Question 17

Describe the four primary challenges faced by retailers when they expand overseas. Provide examples of mistakes made by retailers in foreign markets.

(Essay)

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Question 18

Which of the following is a characteristic of project-based, non-equity ventures?

(Multiple Choice)

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Question 19

Discuss resource and asset-seeking motives for FDI. Why might a company favor acquisition over greenfield investment as an FDI approach?

(Essay)

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Question 20

Showing 1 - 20 of 90

During his presentation, Mario describes how a large Japanese automaker built a factory in Kentucky. Which of the following topics was most likely assigned to Group C?

A greenfield investment is a direct investment to purchase an existing company or facility.

Explain why MNEs prefer acquisition instead of greenfield FDI. Why do foreign governments encourage greenfield FDI?

Cross-licensing agreements are a type of project-based, nonequity venture in which the partners agree to allow access to licensed intellectual property developed by the other on preferential terms.

A firm that develops the capacity to sell its products by investing in marketing and selling operations is ________.

Which of the following is a characteristic of an equity joint venture?

The complexity of the tax system is one of the factors to be considered in selecting FDI locations.

Explain the difference between vertical FDI and horizontal FDI. Provide an example that illustrates the difference between vertical and horizontal integration

In the fashion industry, customer needs change rapidly and managers often locate factories or assembly operations near important customers.

The challenges faced due to FDI are the same all over the world.

The existence of a substantial market motivates many firms to produce offerings at or near customer locations.

New markets, new resources, and improved efficiency are the three main motives for firms to enter foreign markets through FDI.

Discuss four strategies that managers can employ in order to increase the chances of a successful collaborative venture.

While franchising facilitates rapid internationalization, compared to FDI, it affords the firm less control over its foreign operations.

Foreign direct investment is the least risky entry strategy.

Project-based, nonequity ventures are difficult to set up.

A form of collaboration between two firms to form a new, jointly owned enterprise is defined as a joint venture.

Describe the four primary challenges faced by retailers when they expand overseas. Provide examples of mistakes made by retailers in foreign markets.

Which of the following is a characteristic of project-based, non-equity ventures?

Discuss resource and asset-seeking motives for FDI. Why might a company favor acquisition over greenfield investment as an FDI approach?

Introduction: What Is International Business

Globalization of Markets and the Internationalization of the Firm

The Cultural Environment of International Business

Ethics, Corporate Social Responsibility, Sustainability and Corporate Governance

Theories of International Trade and Investment

Political and Legal Systems in National Environments

Government Intervention and Regional Economic Integration

Understanding Emerging Markets

The International Monetary and Financial Environment

Financial Management and Accounting in the Global Firm

Strategy and Organization in the International Firm

Global Market Opportunity Assessment

Exporting and Global Sourcing

Licensing, Franchising, and Other Contractual Strategies

Marketing in the Global Firm

Human Resource Management in the Global Firm

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