Exam 7: Foreign Direct Investment

According to the International Trade Theory, FDI may cause all of the following except:

In 1995, the OECD initiated talks to draft a Multilateral Agreement on Investment that would make it illegal for signatory states to discriminate against foreign investors.

High transportation costs and/or tariffs imposed on imports help explain why many firms prefer _____________ over _____________.

Which of the following is not a reason that the radical position of MNEs was in retreat by the end of the 1980s?

The _______________ view argues that international production should be distributed among countries according to the theory of comparative advantage.

Control over manufacturing, marketing, and strategy is granted to a licensee in return for:

When two or more enterprises encounter each other in different regional markets, national markets, or industries, _____________ arises.

An industry composed of a limited number of large firms (i.e.an industry in which four firms control 80 percent of a domestic market) is referred to as a(n):

What are the benefits of inward FDI (i.e.FDI coming into a country from foreign sources) for the host country? Are these benefits compelling?

Three main costs of inward FDI concern host countries.These are:

Some of Toyota's competitive advantage is due to its superior ability to manage the design, engineering and manufacturing of its automobiles.Despite the fact that some of its products could be licensed for production by another company it does not do so because _____________.

International trade theory tells us that home country concerns about the negative economic effects of offshore production:

Many investor nations now have government backed insurance programs to cover major types of foreign investment risk.The types of risks insurable through these programs include all of the following except:

Since World War II, the largest source country for FDI outflows has been _____________

Because they _______________, the product life-cycle theory and Knickerbocker's theory of FDI tend to be less useful from a business perspective.

Technology takes jobs away from a host country that would otherwise remain there.

The _____________ of foreign direct investment refers to the amount of FDI undertaken over a given period (normally a year).The _____________ of foreign direct investment refers to the total accumulated value of foreign-owned assets at any time.

Countries have been known to occasionally manipulate _____________ to try to encourage their firms to invest at home.

The beneficial effects of FDI may be reduced if most management and highly skilled jobs in the subsidiaries of foreign firms are reserved for _______________ nationals.

Eliminating double taxation of foreign income is one incentive many counties have created to encourage domestic firms to undertake FDI.