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WorksheetsTopic 8 FDI
Total questions: 15
Worksheet time: 46mins
FPI refers to the _____.
direct, hands-on management of foreign assets
amount of FDI moving in a given period in a certain direction
ability of a firm to engage in downstream stage of the value chain in a host country
investment in a portfolio of foreign securities that do not entail the active management of foreign assets
_____ is a type of FDI in which a firm duplicates its home country-based activities at the same value chain stage in a host country.
Horizontal FDI
Vertical FPI
Backward vertical FDI
Platform FDI
Harton, a car manufacturer based in UK, only assembles cars and does not manufacture components in the UK. But in France, Harton enters into components manufacturing through FDI. Harton’s investment in France would be an example of a(n) _____.
FPI
downstream vertical FDI
upstream vertical FDI
horizontal FDI
A vertical FDI refers to a type of FDI in which _____.
a firm duplicates its home country-based activities at the same value chain stage in a host country
a firm invests in a portfolio of foreign securities but without active management of those foreign assets
a firm moves upstream or downstream at different value chain stages in a host country
d.
a firm produces the same products or services in a host nation as it does at home
OLI advantages refer to a firm’s quest for _____via FDI.
oligopolistic advantages, laissez-faire advantages, and intrafirm trade advantages
outsourcing advantages, licensing advantages, and importing advantages
organization advantages, leadership advantages, and innovation advantages
ownership advantages, location advantages, and internalization advantages
MNEs' possession and leveraging of certain valuable, rare, hard-to-imitate, and organizationally embedded (VRIO) assets overseas in the context of FDI refer to _____.
location
ownership
internalization
market imperfections
_____ refers to the replacement of cross-border markets with one firm locating in two or more countries.
Location advantage
Ownership advantage
Internalization
Agglomeration
Firms prefer FDI to licensing because FDI_____.
increases the chances of opportunism when dealing with a host nation entity
requires complete dissemination of technological know-how to host nation entity
protects the firm from economic agglomeration
provides the firm with direct ownership to its foreign assets
_____ refers to the clustering of economic activities in certain locations.
Internalization
Expropriation
Agglomeration
Intrafirm trade
Which of the following political views treats FDI as an instrument of imperialism and as a vehicle for exploitation of domestic resources by foreign capitalists and firms?
Pragmatic nationalism
The free-market view
The radical view
The monopolistic view
Which of the following is a primary cost of FDI to host countries?
Capital inflow
Increase in competition between local firms
Capital and job loss
Loss of sovereignty
Which of the following is a benefit of FDI to home countries?
Decrease in competition between local firms
Capital outflow
Learning from operations
Creation of new jobs
Government’s confiscation of foreign assets is known as _____.
obsolescing bargains
sunk costs
expropriation
conflicting interests
What is the primary difference between FDI and FPI?
Compare and contrast the three political views of FDI.
