MAN3600 Chapter 6

Which of the following is an element of the comparative advantage principle?

relative efficiency of production

Which of the following, if true, weakens Daniel's proposition?

restricting imports reduces the choice of products consumers can by

Which of the following statements would be supported by Michael porter

rivalry among industry competitors spurs innovation

Which of the following is an example of a location-specific advantage

skilled labor

In his International Product Life Cycle theory, Raymond Vernon observed that each product and its manufacturing technologies go through three stages of evolution: intro, maturity and,

standardization

In the _______ phase of international product life cycle theory, knowledge about how produce the product is widespread and manufacturing becomes straightforward

standardization

Which of the following is the last stage of evolution in the international product life cycle theory

standarization

Which of the following is a benefit of internalizing foreign-based value-chain activities

the MNE oversees control of foreign operations and ensures product quality

Which of the following is an example of an industrial cluster?

the consumer electronics industry in japan

Which of the following explains the expansion of born global firms despite the scarcity of financial human and tangible resources

the integration of world economics under globalization

Which of the following is an example of an ownership-specific advantage

the physical assets owned by a firm

Which of the following is true about the first stage of evolution in the international product life cycle?

the product enjoys a temp monopoly at this stage

Which of the following is true about the determinants of national competitive advantage

the strength and sophistication of buyer demand facilitates the development of competitive advantage in particular industries

Which of the following was the analysis revealed by the "Leontief paradox?"

the the US often exported labor-intensive goods and imported more capital-intensive goods

According to Dunning's eclectic paradigm, proprietary technology, managerial skills, trademarks, or brand names, and economics of scale are examples of ownership-specific advantages

true

According to porter, the comparative advantage of a nation depends on the collective competitive advantages of the nation's firms

true

According to the internationalization process model, internationalization takes place in incremental stages over a long time

true

Adam Smith attacked the mercantilism view by suggesting that nations benefit most from fee trade

true

Born global firms are young companies that internationalize early in their evolution

true

Corruption is a common source of market failure

true

Developing new product design and new ways of organizing or training are some of the ways in which companies innovate

true

Free trade produces lower-cost imports that help consumers save money, thereby increasing their living standards

true

Growing intensity of international competition and the integration of world economies under globalization have reduced the cost of venturing abroad, making it easier for firms to internationalize

true

Industrial cluster refers to a concentration of businesses, suppliers, and supporting firms in the same industry at a particular geographic location, characterized by a critical mass of human talent, capital, or other factors endowments

true

Which of the following is a typical outcome of free trade?

unrestricted international trade generally increases the overall prosperity of poor countries

Born global firms are

young companies that internationalize early in their evolution

Which of the following is a comparative advantage

entrepreneurial orientation

Which of the following refer to collaborative venture which results in a new legal entity

equity-based joint ventures

According to the internationalization process model, a firm advances to the ______ stage by initiating limited international activity, typically in the form of basic exporting

experimental involvement

Nations running a trade surplus

export more goods than they import

The _______ rests on the premise that countries differ in the type and quantity of production factors they possess

factor proportions theory

According to comparative advantage principle, what matters most is the absolute cost of production of the product and not the relative efficiency with which a country can produce the product

false

According to porter, competitive advantage, results from firms strategy, structure, and rivalry refer to the presence of clusters of suppliers, competitors, and complementary firms that excel in particular industries

false

According to the absolute advantage principle, national prosperity is the result of a positive balance of trade, achieved by maximizing exports and minimizing imports

false

According to the factor proportions theory, differences in the quantity of factors of production held by countries do not determine international trade patterns

false

According to the internalization theory, firms must reduce control over foreign operations in order to enhance overall effectiveness

false

According to the internationalization process model, a firm is unlikely to receive unsolicited product orders from abroad before advancing to the pre-export stage

false

According to the internationalization process model, a firm starts out in a pre-export phase and is preoccupied with business in its home market

false

In the internationalization process of a firm, the active involvement stage follows the committed involvement stage

false

In today's world, the most important source of national advantage is a country's natural resources

false

Low-cost labor and inexpensive capital are examples of a firm's competitive advantage

false

Modern business executives use the term comparative advantage when referring to the assets of individual firms

false

Monopolistic advantage theory is a framework for determining the extent and pattern of foreign-based value-chain operations

false

National industrial policies designed to build new capabilities and encourage the emergence of new industries typically exclude rigorous educational systems at the precollege and university levels

false

Relative efficiency of production refers to the total value of assets that MNEs own abroad via their investment activities

false

Which of the following statements strengthens the proposition that free trade is beneficial to nations?

free trade increases the standard of living by reducing consumer expenses

Current trends suggest that early internationalizing firms will

gradually become the norm in international business

Which of the following comparative advantages is acquired over time

innovative capacity

______ is an explanation of the process by which firms acquire and retain one or more value-chain activities inside the firm, minimizing the disadvantages of dealing with external partners and allowing for greater control over foreign operations

internationalization theory

Which of the following is true about national industrial policy

it is designed to create monetary and fiscal policies, such as low-interest loans, that provide a stable supply of capital for company investment needs

The eclectic paradigm specifies three conditions that determine whether a company will internationalize via FDI. Which of the following refers to one of these conditions

location-specific advantages

Which of the following is true with regard to mercantilism

mercantilism tends to harm firms that import

A _______ is one or more resources or capabilities a company possesses that few other firms have and that it leverages to generate profits and other returns

monopolistic advanatage

______ theory suggest that firms using FDI as an internationalization strategy must own or control certain resources and capabilities not easily available to competitors

monopolistic advantage

Which of the following explains how firms can use FDI to gain sustain competitive advantage

monopolistic advantage theory

According to Michael Porter, a nation's factor endowments help determine its ______

national competitive advantage

A proactive economic development plan initiated by the government, often in collaboration with the private sector, that aims to develop or support particular within the country is referred to as

national industrial policy

The _______ is one of the 3 key modern perspectives that helps explain the development of national competitive advantage

national industrial principle

Which of the following is true about networks

networks are neither formal organizations with clearly defined hierarchical structures nor impersonal, decentralized markets

Maxdime INC is an international automobile manufacturer that has decided to work on low-cost fuel efficient motorbikes. Foray INC a domestic automobile company based in China, is willing to partner temporarily with the R&D team of Maxdime to design and launch motorbikes specially for the Chinese Market. This is an example of

non-equity-based strategic alliance

Azure Inc. has established a domestic market in clothing and apparels in Thailand and has received orders from abroad. Currently, the firm is investigating the feasibility of undertaking international business. Azure is the _____ stage of internationalization

pre-export

Earth-rite executives are considering internalizing operations in Brazil. Which of the following, if true, best supports this plan?

By internalizing operations, earth-rite will retain control of product quality

According to Porter, Kazmia can attain economic prosperity by systematically cultivating new and superior factor endowments through

proactive national industrial policy

______ describes the total value of assets of MNEs own abroad via their investment activities

FDI stock

Countries cannot create or acquire comparative advantage

False

Mercantilism benefits consumers because restricting imports increases the choice of domestic products they can buy

False

The innovativeness of a nation's firms has no significant impact on the national competitive advantage

False

Which of the following is true with regard to firm-level theories

Firm-level explanations address the question "How can internationalizing firms gain and sustain competitive advantage?"

Which of the following refers to an important monopolistic advantage for firms?

proprietary knowledge

Which of the following is true about absolute advantage principle?

This approach allows the nation to consume more than it otherwise could, generally at lower cost

A benefit of the monopolistic theory is that firms can operate foreign subsidiaries more profitably than the local firms that compete in their own markets

True

Comparative Advantage includes inherited resources, such as labor, climate, arable land, and petroleum reserves

True

Early trade theories failed to consider the fact that the primary participants in international trade are individual firms that differ in significant ways from each other

True

Which of the following would be the most important for Earth-rite executives to determine when deciding whether to collaborate with the Brazilian grocery store chain

Would a collaborative venture allow Earth-rite to internationalize rapidly

Which of the following is true with regard to competitive advantage

a competitive advantage is difficult for competitors to imitate

According to the _______, a country benefits by producing only those products in which it has complete advantage or that it can produce using fewer resources than other country

absolute advantage principle

Which of the following is true with regard to new trade theory

according to new trade theory, trade is beneficial even for countries that produce only a limited variety of products

International entrepreneurship is a new field of scholarly inquiry that is a result of the _______ phenomenon

born global

In the _____ stage of the internationalization process, a firm targets numerous foreign markets via various entry modes, especially FDI

committed involvement

The gulf nations benefit economically from rich petroleum reserves in the region. This is an example of

comparative advantage

______ refers to the superior features of a country that provide unique benefits in global competition, typically derived from either natural endowments or deliberate national policies

comparative advantage

The ______ states that it can be beneficial for two countries to trade without barriers as long as one is relatively more efficient at producing goods or services needed by the other

comparative advantage principle

In recent years, business executives and scholars have used _____ to refer to the advantages posessed by nations and individual firms in international trade and investment

competitive advantage

In the context of national industrial policy, which of the following actions by the government of Kazmia would be the most beneficial for the long-term economic security of the country?

devoting resources to improve national infrastructure

Competitive advantage refers to

distinctive assets or competencies of a firm that are difficult for competitors to imitate and are typically derived from specific knowledge, capabilities, skills, or superior strategies

In which of the following stages of the internationalization process is a firm preoccupied with business in its home market?

domestic focus

Which of the following benefits would Earth-rite most likely accrue if it entered into a joint venture with the Brazilian grocery store chain

earth rite would have access to the foreign partners' know-how

_______ is the belief that national prosperity is the result of a positive balance of trade, achieved by maximizing exports and minimizing imports

Mercantilism

_________ argues that increasing returns to scale, especially economics of scale, are important for superior international performance in industries that succeed best as their production volume increases

New trade theory

According to porter's competitive advantage of nations, ______ refers to the nature of home-market demand for specific products and services

demand conditions