Int. Business Chpt. 8

BLANK of FDI refers to the movement Of investment out Of a country, and FDI BLANK are the flow of investment into a country.

OUTFLOW INFLOW

What are two measures countries can employ to restrict foreign direct investment?

- Performance rquirements - Ownership restraints

What two factors cause major adverse effects on a host country's balance of payments?

- The outflow Of earnings from a foreign subsidiary to its parent company - A foreign subsidiary importing a large number of inputs from abroad

A firm becomes a multinational enterprise when it pursues BLANK (use abbreviation) which is at least an interest of 10% in a foreign business entity.

FDI

Establishing a new operation in a foreign market and acquiring or merging with a foreign business are examples of BLANK (use abbreviation).

FDI

BLANK allows a company to collect a royalty fee from a foreign firm that it has granted the right to produce and sell its product.

Licensing

What body is concerned with FDI?

The WTO

Tracking its expenditures and its receipts from other countries is found in a country's BLANK accounts.

balance of payments

One key factor that leads to adverse effects on a host country's BLANK accounts is when a foreign subsidiary imports a substantial number of inputs from abroad, which results in a debit on the current account.

blance of payment

The BLANK paradigm combines the various perspectives Of foreign direct investment into a holistic theory.

electic

An example of BLANK is when firms benefit from each other's knowledge generation.

externalities

Economists refer to knowledge "spillovers" as BLANK and there is a theory that suggests firms can benefit from these "spillovers" by locating close to their source.

externalities

BLANK theory tries to explain why firms often prefer FDI over licensing as a method for getting into foreign markets.

internalization

A(n) BLANK operation. investment is where a firm goes to a foreign market and establishes a new

greenfield operation

The situation where multiple firms encounter each other in different regional markets, national markets or industries is called BLANK

multi-point competition

The US Department of Commerce states that once a business undertakes foreign direct investment it becomes a(n)

multinational enterprise

One of the aspects of FDI that the various theories of FDI tries to explain is the BLANK of FDI flows, which deals with why certain locations are favored as targets of FDI.

pattern

The only way a country can support a current account deficit, also known as a trade deficit, in the long-run is to BLANK

sell off assets to foreigners

The World Trade Organization has based the majority of its efforts on pushing for the liberalization of regulations governing BLANK

services

The BLANK of FDI measures the total accumulated value of a company's foreign-owned assets during a specific time.

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