Ch 8 IBUS 330 Reading

For which of these products does the attractiveness of exporting decrease relative to either FDI or licensing? Multiple choice question.

A product that can be produced almost anywhere

True or false: Critics argue that not all new jobs created by FDI represent net additions in employment. This is due to the ______ effect where some jobs created are offset by jobs lost elsewhere

False

True or false: Today, many countries have an open stance toward foreign direct investment.

False

True or false: When tight control over a foreign entity is the goal of a company, it is in the best interest of that company to forge a licensing agreement rather than use foreign direct investment.

False

Along with the United States, which five countries accounted for 60% of all FDI outflows from 2000-2020?

Germany France The Netherlands Japan The United Kingdom

Which theory BEST explains why the first firm in an oligopoly decides to undertake foreign direct investment rather than exporting or making a licensing agreement?

Internalization theory

What are two alternatives to FDI?

Licensing Exporting

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

Performance requirements Ownership restraints

What are two benefits of FDI for a host country?

Resource-transfer effects Economic growth

Tracking its expenditures and its receipts from other countries occurs in a country's _____ -of- _____ accounts. (Enter one word in each blank.)

balance payment

The results of a negotiation depend on the ______ power of the parties involved.

bargaining

When a firm invests in plants, equipment, and R&D as a result of increased competition, it is engaging in ______ investment.

capital

At one time, the British advanced corporation tax system taxed British companies' foreign earnings at a higher rate than their domestic earnings. This was put in place to ______.

encourage companies to invest at home

China's FDI efforts have typically been toward less developed nations and directed at Blank______ industries.

extractive

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

Adverse effects on competition Perceived loss of national sovereignty & autonomy Adverse effects on balance of payments

Which country has shown steady and dramatic growth as a source of FDI since 2010 and has now turned their attention to more advanced nations?

China

______ has become a major recipient of FDI and hit a record of $149 billion in 2020.

China

Firms for which licensing is a good option tend to have what two characteristics?

low-tech industries tight control over foreign operations not necessary

The increase in competition in the national telecommunications market that resulted from the 1997 World Trade Organization agreement resulted in what two benefits?

lower prices modernization of telephone networks

The ______ of FDI measures the total accumulated value of a company's foreign-owned assets at a specific time

stock

What is a benefit of inward FDI for a host country?

Employment effect

Once a business undertakes foreign direct investment it becomes a(n) ______.

multinational enterprise

Historically countries like Iran and India that are more ______ than ______ have favored the radical position that FDI is bad.

nationalistic, socialistic