Exam 16: Foreign Direct Investment and Cross-Border Acquisitions

Shareholders of U.S.bidders (acquiring firms in M&A)experience significant positive abnormal returns when firms expand into new industries and geographic markets.

When a firm holds assets in many countries,

Country risk

The communist victory in China in 1949 is an example of

Which of the following statements is true about product life cycle theory?

Shareholders of U.S.targets experience higher wealth gains when they are acquired by foreign firms than when acquired by U.S.firms.

North Korea,Iran,and Cuba are examples of

During the five-year period 2004-2008,

Political risk refers to:

Also,MNCs often find it profitable to locate manufacturing/processing facilities near

Governments regulate international trade

Under a 1981 Voluntary Trade Agreement Japanese automobile manufacturers were not allowed to increase their exports to the U.S.market.As a result

Labor services in a country can be severely underpriced relative to its productivity

According to Raymond Vernon (1966),

In 1992,the Enron Development Corporation,a subsidiary of the Houston-based energy company,signed a contract to build the largest-ever power plant in India,requiring a total investment of $2.8 billion.After Enron had spent nearly $300 million,the project was canceled by Hindu nationalist politicians in the Maharashtra state where the plant was to be built.Which of the following is true?

Cross-border acquisitions are generally found to be synergy-generating corporate activities.

An example of forward vertical FDI

Considering the fact that many barriers to international portfolio investments have been dismantled in recent years,

Why do governments regulate international trade?

U.S.car makers were forced to build their own network of dealerships to enter the Japanese market.