Chapter 8 assignment

oligopoly

A ___________ is an industry made up of a limited number of large firms where there is an interdependence of the major players

balance of payment

A country's ______________ account tracks the country's payments to and receipts from other countries.

loss

A host country cost of FDI could be the ____________ of sovereignty and autonomy

foreign

A key benefit to FDI in a home country is from the inward flow of ___________ earnings

political influence

A number of investor countries try to encourage FDI through the use of ____________

Germany, Japan, Netherlands, United Kingdom, France

Along with the United States, which five countries accounted for 60% of all FDI outflows from 1998 to 2018?

offshore

FDI that is pursued to serve the home market is called ____________ production.

trade barriers are low, transportation costs are low

FDI theory suggests that exporting is preferable to licensing and FDI as long as what two conditions exist?

It has accelerated faster than the growth in world trade

How has the flow of FDI compared to the growth in world trade since 1990?

lower prices for goods

One potential benefit to consumers related to offshore production is ________________

restrict

Ownership restraints and performance requirements are two ways in which governments can _____________ FDI.

pragmatic nationalism

Pre-1980, Japan blocked the majority of potential foreign investments. Yet, if a company that had cutting edge technology wanted to invest in Japan, they were allowed to undertake FDI. This is an example of ________________

low, low

The Kendrick Corporation has _____________ transportation costs and is facing ____________ trade barriers. This company should choose exporting over FDI.

services

The World Trade Organization has based the majority of its efforts on pushing for the liberalization of regulations in international trade governing ___________

flow

The ___________ of FDI describes the amount of FDI undertaken during a year.

eclectic paradigm

The ____________ combines the various perspectives of foreign direct investment into a holistic theory.

double

To encourage FDI, many countries have eliminated ____________ taxation of foreign income.

true

True or false: Jim's US-based paper products company sources paper from a plant in Brazil that takes advantage of the available forestry near the plant. This is an example of a location-specific advantage.

ownership restraints, performance requirements

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

United States

What country has been the largest source of FDI since World War II?

WTO

What international organization is involved in the governing of FDI?

employment effect

What is a benefit of FDI for a host country?

foreign direct investment

What is a company participating in when it directly invests in facilities to produce or market a product in a foreign country?

location specific

What name is given to the advantages that coincide with utilizing resource endowments or assets tied to a specific area?

developed nations

past activity of FDI shows that the majority of it has been directed at

multinational enterprises

The radical view toward FDI argues that ____________ extract profits from the host country and take them back to their home country.

pattern

The various theories of FDI try to explain the ____________ of FDI flows, which deals with why certain locations are favored as targets of FDI

limited number of firms, large firms

What are two characteristics of oligopoly?

free market

Which view of FDI is based on the classical international trade theory of Smith and Ricardo asserting that international production should be based on comparative advantage?

establishing a new operation in a foreign market, acquisition or merger with an existing foreign firm

What are the two types of FDI?

free market

The ____________ view of FDI states that international production should be allocated based on the theory of comparative advantage.

increased supply of capital, a current account surplus, greater economic growth

What are positive contributions that FDI can provide to a host country?

inward flow of foreign earnings, MNE (multinational enterprise) learns skills from exposure to foreign markets, foreign subsidiary creates demand for home country imports

What are the three benefits of FDI to home a country?

perceived loss of sovereignty and autonomy, adverse effects on competition, adverse effects on balance of payments

What are the three potential costs of FDI to host countries?

an increase in FDI aimed at countries that have liberalized their FDI regimes, an increase in the volume of FDI

What are two current trends in FDI (foreign direct investment)

exporting

When a company produces a good in the home country and then ships it to another country for sale it is called __________

foreign direct investment

Establishing a new operation in a foreign market and acquiring or merging with a foreign business are examples of _________

licensing

Grant's company has given a company in Japan the right to produce and sell its line of active wear. For every article of clothing the Japanese company sells, it pays Grant's company a fee. This is an example of ____________

multinational

The basis in Marxist politics is evident when radical writers argue that _____________ enterprises are an instrument of imperialist domination.

balance, payment

Tracking its expenditures and its receipts from other countries occurs in a country's ____________ of ____________ accounts.

pragmatic nationalism

Which view of FDI states that there are benefits and costs to FDI and that countries attempt to maximize the benefits and minimize the national costs of FDI?

Licensing

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