Exam 7: Foreign Direct Investment

Besides the United States, other important source countries for FDI include?

For the most part Canadian FDI outflow in last few years went to ________________

When a firm exports to a foreign country, foreign direct investment occurs.

In practice, many countries have adopted neither a radical policy nor a free market policy toward FDI, but instead a policy that can best be described as pragmatic nationalism.

Externalities are knowledge spillovers that occur when companies in the same industry locate in the same area.

FDI is often undertaken as a response to:

In a ________________ view, FDI should be allowed only if the benefits outweigh the costs.

The MNE is seen as an instrument for dispersing the production of goods and services to those locations around the globe where they can be produced most efficiently, according to the ________________ view.

A rationale for wanting control over the operations of a foreign entity is that the firm might wish to take advantage of differences in factor costs across countries, producing only part of its final product in a given country, while importing other parts from where they can be produced at a lower cost.

Despite its advantages, FDI has been described as an "expensive" and "risky" international growth strategy.Other things being equal, why is FDI expensive and risky? Compare the risks involved with FDI to the risks involved with exporting and licensing.

Four Seasons Hotels and Resorts has shifted their focus from the acquisition of foreign properties to offering management contracts for local owners of hotel properties.This shift has taken place, because __________________.

There is a branch of economic theory known as internationalization theory that seeks to explain why firms often prefer exporting to foreign direct investment.

The establishment of a wholly new operation in a foreign country is referred to as a(n):

The _______________ view of FDI traces its roots to Marxist political and economic theory.

The establishment of Japanese automakers' branch plants in Canada does not help the U.S.in terms of its _________________.

Most FDI has been directed at the developed nations of the world as firms based in advanced countries invested in the others' markets.

FDI is an acronym that stands for

Historically, there have been high levels of FDI outflows from the United States.

Offshore production refers to FDI undertaken to serve the home market.

The largest source country for FDI is Japan.