GB 10

Which of the following is an advantage of R&D contracts?

Ability to tap into the best

refers to the clustering of economic activities in certain locations

Agglomeration

Which of the following is an advantage of direct exports?

Better control of distribution

A recent survey revealed that more than nine out of ten people prefer a watch made by firms in Switzerland to one made in India or U.S.A or any other country. This is an example of

Country of Origin Effect

is the difference between two cultures along identifiable dimensions.

Cultural Distance

With regard to foreign market entry, the resource-based view argues that foreign firms

Deploy Overwhelming resources and capabilities to offset

are the most basic non-equity mode of entry, capitalizing on economies of scale in production concentrated in the home country and providing better control over distribution.

Direct Exports

A build-operate-transfer (BOT) agreement is an equity mode of entry.

False

A disadvantage of licensing is high development costs.

False

According to the stage model, firms will enter culturally distant countries for their first internationalization.

False

Equity modes tend to reflect relatively smaller commitments to overseas markets, whereas non-equity modes are indicative of relatively larger, harder-to-reverse commitments.

False

Greenfield operations are a type of wholly owned subsidiary that does not require any

False

Indirect exports are the most basic mode of entry, capitalizing on economies of scale in production concentrated in the home country.

False

Late movers face greater technological and market uncertainties.

False

Licensing and franchising are examples of equity modes of entry.

False

Location-specific advantages never change and only tend to grow.

False

The resource-based view suggests that firms need to take actions deemed legitimate and appropriate by the various formal and informal institutions governing market entries.

False

Turnkey projects cannot be established without FDI.

False

A disadvantage of acquisitions is

High Development Costs

Which of the following entry modes is a type of strategic alliance?

Licensing

Which of the following is an advantage shared by both greenfield operations and acquisitions?

Protection of Know-How

Natural resource-seeking firms have compelling reasons to enter culturally and institutionally distant countries. This is a counter example of _____.

The Stage Model

The country-of-origin effect refers to

The positive or negative perception of firms and products from a certain country

Which of the following is true of indirect exports?

They export through domestically based export intermediaries.

Agglomeration explains why certain cities and regions can attract businesses even in the absence of obvious geographic advantages.

True

Co-marketing has the ability to reach more customers but with limited control and coordination.

True

Cultural distance is the difference between two cultures along some identifiable dimensions.

True

Greenfield operations and acquisitions have complete equity and operational control.

True

Strategic goals and cultural and institutional distances influence the location of foreign entries.

True

The preemption of scarce resources is a first mover advantage.

True

The resource-based view argues that foreign firms need to deploy overwhelming resources and capabilities to offset their liability of foreignness.

True

In _____, clients pay contractors to design and construct new facilities and train personnel.

Turnkey Projects

Which of the following is a non-equity mode of entry?

Turnkey Projects

Which of the following is an equity mode of entry?

Wholly Owned Sub

Greenfield operations are similar to acquisitions in that they are both examples of

Wholly owned subside

A greenfield operation refers to

Wholly owned,new factories from office scratch

Co-marketing refers to

efforts among a number of firms to jointly market their products and services