Exam

The European Union is classified as a(n) ________.

regional economic bloc

The Organisation for Economic Co-operation and Development (OECD) is classified as a(n)

special interest group

Which of the following is characteristic of an effective legal system?

systematically enforced laws and regulations

Which of the following is a key reason that a focal firm would most likely enter a collaborative venture with a foreign firm?

the foreign firm can fill an important gap in the focal firm's value chain

which of the following best explains why some service industry firms most likely enter foreign markets through FDI

the service sector offered by the firm requires direct contact with customers

Religion-based totalitarian states are called ________.

theocratic

Born global firms are

young companies that internationalize early in their evolution

Which of the following would be the best way for a manager to learn about country risks in a host country?

employees working in the host country

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

equity-based joint ventures

Nations running a trade surplus

export more goods than they import

Which of the following is an element of socialism often found in democratic societies?

government intervention in the affairs of individuals and firms

Current trends suggest that early internationalizing firms will ________.

gradually become the norm in international business

The World Bank is classified as a(n) ________.

international organization

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

Income repatriation laws affect MNEs that earn profits in foreign countries by ________

limiting the amount of net income and dividends that can be transferred to the home-country headquarters

The specifies three conditions that determine whether a company will Internationalize via FDIWhich of the following refers) to one of those ?

location-specific advantages

A consortium is defined as ________.

multiple partners participating on a large-scale project

The ________ is one of the three key modern perspectives that helps explain the development of national competitive advantage.

national industrial policy

Which of the following best explains why India was once characterized by high country risk

political leaders enacted laws that targeted foreign firms for harassment

Which of the following must be considered in selecting foreign direct investment locations?

All of the above

fundamental tenet is that capital and wealth should be vested in the state and used primarily as a means of production rather than for profit

Authoritarianism

World Conference (Scenario)At a world conference assembled in Tokyo, representatives from nearly every country in the world have gathered to discuss issues related to international trade. Representative A is from a totalitarian state. Representative B is from a socialist nation. Representative C hails from a democratic society.Representative B is most likely from which of the following countries?

Bolivia

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

Born global

Country risk is considered similar to

Political risk

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

Pre-export

The rate of inflation is a(n)____ factor to be considered while selecting the location for FDI

Profit retention

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

Proprietary technology

Islamic law is based on the ________.

Quran

Which of the following legal systems is largely practiced in the Middle East?

Religious

Which of the following statements would be supported by Michael Porter?

Rivalry among industry competitors spurs innovation.

World Conference (Scenario)At a world conference assembled in Tokyo, representatives from nearly every country in the world have gathered to discuss issues related to international trade. Representative A is from a totalitarian state. Representative B is from a socialist nation. Representative C hails from a democratic society.50) Representative A is most likely from which of the following countries?

Romania

Which of the following statements is true about managing country risk

Scanning allows a firm to assess the potential country risk

________ fundamental tenet is that capital and wealth should be vested in the state and used primarily as a means of production rather than for profit.

Socialism

In his International Product Life Cycle PLC) Theory, Raymond observed that each product and its manufacturing technologies go through three stages evolutionintroduction, maturity, and

Standardization

In the __phase of International product life cycle theory, knowledge about how to produce the product is widespread and manufacturing becomes straightforward

Standardization

Which of the following is true about the first stage of evolution in the International product life cycle theory

Standarization

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

Committed involvement

Which of the following is a trend seen in the modern international economy?

Companies primarily use acquisitions to enter foreign markets.

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

Competitive advantage

According to Porter's competitive advantage of nations, ________ refer to the nature of home-market demand for specific products and services.

Demand conditions

Which form of government is characterized by private property rights and limited government?

Democratic

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 is a comparative advantage?

Entrepreneurial orientation

International Business Class (Scenario)Students in Professor Manning's international business class have been assigned the task ofexplaining the different types of FDI. Professor Manning formed groups among students. The groupsare to research their assigned topic and present their information to the class using examples of real-world firms for illustration. Jessica Hanson is the leader of Group A; Manu Patel is the leader ofGroup B; and Mario Witherspoon is the leader of Group C.During her presentation, Jessica describes how two automakers joined forces and formed aseparate firm by pooling their assets. Which of the following topics was most likely assigned toGroup A?

Equity joint venture

Which of the following terms is used to refer to a focal firm's partial ownership of an existing firm?

Equity participation

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

Which of the following terms refer to the application of home-country laws to persons or conduct outside national borders

Extraterritoriality

A greenfield investment is a direct investment to purchase an existing company or facility

FALSE

Common law is also known as code law.

FALSE

International expansion invariably results in a decrease in a firm's economies of scale

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

Trade unions are part of a country's legal system.

FALSE

describes the total value of assets that MNES own abroad via their investment activities

FDI STOCK

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

FDI stock

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

Common law originated in the United States.

False

FDI is the least taxing entry strategy that a firm can choose

False

Vertical integration is an arrangement in which the firm owns, or seeks to own, the activities performed in a single stage of its value chain

False

According to Dunnings eclectic paradigm, proprietary technology, managerial skills, trademarks or brand names, and economies of scale are examples of ownership-specific advantages.

TRUE

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

TRUE

An embargo is an official ban on exports to or imports from a particular country. True or false

TRUE

Civil law is in origin and based on laws passed by national and local legislatures

TRUE

Democracy is closely associated with openness.

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

Industrial cluster refers to a concentration of businesses, suppliers and supporting firms in the same industry at a particular geographic location, characterize mass of human talent , capitalor other factor endowments

TRUE

Which of the following is a disadvantage of equity joint ventures?

Termination difficulties

How does the acquisition of a foreign company most likely benefit a focal firm in the foreign market?

The focal firm can extend its market reach through readily available distribution networks.

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.

Companies opt for FDI to obtain advantages associated with locating at the of knowledge development and innovation in a industry

True

World Conference (Scenario)At a world conference assembled in Tokyo, representatives from nearly every country in the world have gathered to discuss issues related to international trade. Representative A is from a totalitarian state. Representative B is from a socialist nation. Representative C hails from a democratic society.Representative C is most likely from which of the following countries?

Uruguay

An arrangement whereby the firm owns, or seeks to own, multiple stages of a value chain for producing sellingand delivering a product or service is termed as

Vertical integration

Both common law and civil law systems originated in...

Western Europe

Which of the following best exemplifies corporate social responsibility

an automotive battery firm offering free technical training to students of a deprived community

Which of the following is a characteristic of successful international retailers?

an entrepreneurial approach to foreign markets and an understanding of the target market

A firm that pursues a collaborative venture to access raw materials is demonstrating a(n) ________ motive.

asset-seeking

Competitive advantage refers to the

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

Which of the following is true with regard to competitive advantage?

A competitive advantage is difficult for competitors to imitate.

Which of the following is a characteristic of project-based, non-equity ventures?

A specific agenda and timeframe

A firm that pursues foreign direct investment to take advantage of government incentives is demonstrating a(n) ________ motive.

efficiency-seeking

________ is the seizure of corporate assets without compensation.

Confiscation

A(n)\ is a project-based, usually nonequity venture initiated by multiple partners to fulfill a large-scale project

Consortium

________ are the people and organizations that support the political system and receive government resources.

Constituents

are the people and organizations that support the political system and receive government resources

Constituents

Which of the following terms indicates potential loss or adverse effects on company operations and profitability caused by developments in a countrys legal environments

Country risk

A firm that builds a new manufacturing facility in a foreign market is participating in a(n)

Greenhouse investment

A firm that owns the activities performed in a single stage of its value chain is demonstrating

Horizontal integration

Collaborative ventures benefit SMEs by providing them with

Increased amount of capital

Which of the following comparative advantages is acquired over time?

Innovative capacity

Which of the following represents a human resource factor that firms must consider when selecting an FDI location?

Involvement of labor unions

An Individual from a country with a high degree of political risk would most likely be from

Iraq

Which of the following is true with regard to mercantilism?

Mercantilism tends to harm firms that import.

A(n) ___Box a special type of acquisition in which two companies join to form a larger firm

Merger

___theory suggests that using FDas an internationalization strategy must own or control certain resources and capabilities not easily availab

Monopolistic

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

National competitive advantage

___argues that increasing to scale, especially economies of scale, are important for superior international performance in their production volume increases

New trade theory