Bus 250 -01 chapter 6
licensing
Bandoy Corp., a renowned cell phone manufacturing company, decided to engage in international business. So, Bandoy Corp. sold its technology to several multinational enterprises in other countries. This market entry mode is an example of _____.
agglomeration
Folexa is the largest producer of spices in the world, and its location is an added advantage to its business. It is surrounded by six trading countries. Besides, located close to the southern region of the continent, it attracts business from the neighboring continents as well. Such clustering of economic activities is referred to as _____.
explicit knowledge
Knowledge that can be written down and transferred without losing much of its richness is called _____
False
Location advantage refers to possession and leveraging by a multinational enterprise (MNE) of certain valuable, rare, hard-to-imitate, and organizationally embedded (VRIO) assets overseas.
upstream vertical FDI.
Picnia Corp., a leading automobile manufacturing company, assembles its cars in Deltaland, but the components are manufactured in Ristasia. In this scenario, Picnia Corp. has engaged in:
True
Question 5 Unsaved Foreign direct investment (FDI) results in the loss of some economic sovereignty in a host country.
True
Tacit knowledge is noncodifiable and its acquisition and transfer requires hands-on practice.
Licensing
The international trade between two subsidiaries in two countries controlled by the same multinational enterprise (MNE) is called _____.
False
The quest for location advantages has to fit with a firm's strategic goals.
The radical view on FDI
Which of the following political views is hostile to foreign direct investment (FDI)?
It provides a firm with equity ownership rights and management control rights.
Which of the following statements is true of direct ownership?
It involves locating and operating in host countries.
Which of the following statements is true of internalization?
Dissemination risk
_____ is defined as the possibility of unauthorized diffusion of firm-specific know-how.
True
A non-multinational enterprise (non-MNE) firm can do business abroad by exporting.
Technology spillover
Bricklanes Inc. is a company that designs and manufactures materials for interior decorations. The company expands its business in Cronje Republic to gain the advantages of foreign direct investment. As a result, several companies in Cronje Republic have adopted new advancements that are introduced by Bricklanes Inc. in their processes. In this case, which of the following benefits has the host country acquired?
ownership advantage.
HiSpark Inc., a leading sports accessories brand, believes that it has to possess rare, hard-to-imitate technology, valuable brand name, and organizationally embedded culture to achieve consistent success as a multinational enterprise. In this case, HiSpark Inc. is focusing on:
suing the opportunistic firm in a foreign country is costly and uncertain
In international business, when a host country firm acts opportunistically, _____.
acit knowledge is difficult to transfer and can be acquired only by practice.
In licensing, a firm that receives explicit knowledge is not likely to succeed because:
Firms can beat rivals abroad by acquiring the advantage of proprietary technology of manufacturing products.
In the context of foreign direct investment, which of the following statements is true of ownership advantages?
False
International transaction costs tend to be lesser than domestic transaction costs.
horizontal FDI.
Rayato Inc. is a cell phone manufacturing company headquartered in Swinland. The company designs, manufactures, and markets cell phones in Swinland. It has recently engaged in foreign direct investment (FDI), setting up its manufacturing units in three other countries. Rayato Inc. has decided to follow the same value-chain stage in the host countries as in Swinland. In this scenario, Rayato Inc. has engaged in:
leads to a win-win situation for both home and host countries.
The free market view on foreign direct investment (FDI):
acquire location advantages.
When one firm enters a foreign country through foreign direct investment (FDI), its rivals are likely to follow by undertaking additional FDI in a host country to:
FDI flow
_____ is the amount of foreign direct investment (FDI) moving in a given period (usually a year) in a certain direction
Foreign portfolio investment (FPI)
_____ refers to holding securities, such as stocks and bonds, of companies in countries outside one's own but does not entail the active management of foreign assets. Question 7 options:
