CHAPTER 8: Foreign Direct Investment

The amount of foreign direct investment (FDI) undertaken over a given time period is known as the flow of FDI.

• TRUE

• FALSE

FDI has been declining in the last few decades because protectionist pressures have become less intense.

• TRUE

• FALSE

Mergers and acquisitions are quicker to execute than greenfield investments.

• TRUE

• FALSE

Licensing involves the establishment of a new operation in a foreign country.

• TRUE

• FALSE

By placing tariffs on imported goods, governments can increase the cost of exporting relative to foreign direct investment and licensing.

• TRUE

• FALSE

An oligopoly is an industry composed of a limited number of large firms.

• TRUE

• FALSE

Rivals rarely imitate what a firm does in an oligopoly.

• TRUE

• FALSE

John Dunning pioneered the eclectic paradigm.

• TRUE

• FALSE

According to the pragmatic nationalistic view, the MNE is a tool for exploiting host countries to the exclusive benefit of their capitalist-imperialist home countries.

• TRUE

• FALSE

Only a few countries have adopted the free market view in its pure form.

• TRUE

• FALSE