Exam 7: Foreign Direct Investment

What is meant by the term "following clients?" In which industries would the strategy be common?

In foreign direct investment, 100 percent ownership of a company does not guarantee its complete control.

Scenario: Blickinstock at the Crossroads Auto parts supplier, Blickinstock Ltd., would like to expand its presence in Latin America. To that end, Blickinstock is trying to decide whether to purchase an existing company in a remote region of Argentina or build its own subsidiary. Keith Moon, Blickinstock's vice president of global business development, will be making a presentation to the board outlining the company's options. -If Blickinstock's home government tries to stop the company from investing in Latin America, the government may be trying to ________.

Which of these do home-country governments NOT use to promote outbound foreign direct investment?

According to the market imperfections theory, one common market imperfection is trade barriers.

One reason a home country may discourage foreign direct investment outflows is to protect its "sunset" industries.

To capitalize on buyer perceptions of high quality, a watchmaker might produce in ________.

Building a subsidiary abroad from the ground up is called a greenfield investment.

________ prohibit non-domestic companies from investing in certain industries or owning certain types of businesses.

________ is an investment that does not involve obtaining a degree of control in a company.

Building a subsidiary abroad from the ground up is called a(n) ________.

The ________ account within the current account includes exports and imports of services.

Describe any three management issues involved in foreign direct investment decisions.

Increasing globalization is causing a growing number of international companies from emerging markets to undertake foreign direct investment.

Which of the following can motivate foreign direct investment?

Discuss the balance of payments using its two major components.

The international product life cycle theory says that in the maturing product stage, a company builds production capacity in low-cost developing nations to serve world markets.

Which of these can a host country use to restrict incoming foreign direct investment?

The eclectic theory states that firms undertake foreign direct investment when the features of a particular location combine with ownership and internalization advantages to make a location appealing for investment.

Which of the following is a reason for host country intervention in foreign direct investment (FDI) flows?