Chap 4

What is one of the main objectives of host developing countries in attracting FDI?

• Discouraging local entrepreneurship

• Increasing restrictions on foreign investment

• Improving standards of treatment of foreign investors

• Limiting market access for foreign affiliates

What does investor protection in the context of FDI include?

• Compensation in the event of nationalization

• Restrictions on foreign ownership

• Tax incentives for local firms

• Mandatory performance requirements

Which of the following is a key policy category for FDI?

• Expropriation

• Nationalization

• Taxation

• Liberalization

What is a characteristic of performance requirements imposed on foreign affiliates?

• They are only applicable to domestic firms

• They are optional for foreign investors

• They are designed to create inefficiency

• They are always beneficial for the host economy

What is the purpose of financial incentives in FDI?

• To discourage foreign investment

• To attract new FDI and prevent relocation

• To increase taxes on foreign affiliates

• To limit the operations of foreign firms

What is a common concern regarding technology transfer in FDI?

• Increased competition among local firms

• Lack of local expertise to absorb technology

• Overregulation of domestic firms

• Excessive taxation on foreign firms

What is the main objective of competition policy in the context of FDI?

• To promote monopolistic practices

• To ensure efficient allocation of resources

• To increase government control over markets

• To limit foreign investment

What is a Bilateral Investment Treaty (BIT)?

• An agreement between multiple countries

• An agreement between two countries regarding investment

• A treaty that focuses solely on trade

• A non-binding guideline for investment

What is one of the recent trends in Bilateral Investment Treaties?

• More precise definitions of investment

• Less emphasis on investor protection

• Elimination of dispute settlement mechanisms

• Increased restrictions on foreign investment

What does the term 'creeping expropriation' refer to?

• A type of investment promotion strategy

• Direct seizure of property by the state

• Gradual government actions that diminish property value

• Immediate compensation for expropriated assets