Global Business Ch. 06

MNEs that enter foreign markets through foreign direct investment do not have OLI advantages.

• a. True

• b. False

Entry strategies may change over time.

• a. True

• b. False

MNEs are firms that are truly global.

• a. True

• b. False

Which of the following best describes foreign direct investment (FDI)?

• a. A firm’s direct investment in production and/or

  service activities abroad.

• b.The purchases of foreign securities by people within

  the U.S.

• c.The purchases of U. S. securities by people from

  other countries.

• d. Avoidance of brokers or other financial

  intermediaries when making foreign investments.

Selling the rights to intellectual property for a royalty

fee is involved in:

• a. Licensing/franchising.

• b. Turnkey projects.

• c. R&D contracts.

• d. Comarketing.

A upstream vertical FDI is a type of horizontal

FDI in which a firm engages in an upstream stage

of the value chain in a host country.

• a. True

• b. False

FDI is an

investment in a portfolio of foreign securities

such as stocks and bonds.

• a. True

• b. False

What is the total accumulation of inbound FDI in a country or outbound FDI from a country across a given period (usually several years)?

• a. FDI flow.

• b. FDI inflow.

• c. FDI outflow.

• d. FDI stock.

Knowledge spillovers indicate that knowledge being diffused from one firm to others among closely located firms.

• a. True

• b. False

Free market view is a political view that suggests that FDI unrestricted by government intervention is best.

• a. True

• b. False