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

Mergers and acquisitions are quicker to execute than greenfield investments.

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

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

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

Rivals rarely imitate what a firm does in an oligopoly.

John Dunning pioneered the eclectic paradigm.

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.

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

Countries adopting a pragmatic stance pursue policies designed to maximize the national benefits and minimize the national costs.

Research supports the view that multinational firms often transfer significant technology when they invest in a foreign country.

Direct effects of FDI arise when jobs are created in local suppliers as a result of the FDI and when jobs are created because of increased local spending by employees of the MNE.

Governments normally are concerned when their country is running a surplus on the current account of their balance of payments.

In general, FDI in the form of greenfield investments should increase competition.

For the home country, the current account of the balance of payments improves if the purpose of the foreign investment is to serve the home market from a low-cost production location.

Offshore production refers to FDI undertaken to serve the host market.

The WTO supports the promotion of international trade in services.

One way countries have encouraged firms to undertake FDI is through double taxation.

The British advanced corporation tax system taxed British companies' foreign earnings at a higher rate than their domestic earnings. This tax code created an incentive for British companies to invest abroad.

Tax concessions, low-interest loans, and grants or subsidies are all incentives that governments offer to foreign firms to invest in their countries.

Because licensing is more costly and more risky than FDI, other things being equal, the theories argue that FDI is preferable to licensing.

Licensing is usually a good option for firms in high-tech industries where protecting firm-specific expertise is of paramount importance.

FDI occurs when a firm

Which of the following is an example of a greenfield investment?

Which of the following statements is true about the growth of foreign direct investment in the world economy over the last few decades?

The majority of cross-border investment in the developed world is in the form of

An Italian car manufacturer purchases a U.S. producer of car tires. This is an example of

Developing nations currently account for________mergers and acquisitions.

Since World War II, the largest source country for FDI has been

Which of the following factors has had a positive effect on the volume of foreign trade investments?

What has made the United States an attractive target for foreign direct investment?

The stock of FDI refers to the

The________ of FDI refers to the amount of FDI undertaken over a year.

What is the primary reason Africa has attracted FDI in recent years?

What primarily explains why developing nations are characterized by a lower percentage of cross-border mergers and acquisitions compared to developed nations?

When contemplating FDI, why do firms apparently prefer to acquire existing assets rather than undertake greenfield investments?

________arises when two or more enterprises encounter each other in different regional markets, national markets, or industries.

________arise(s) from using resource endowments or assets that are tied to a particular foreign location and that a firm finds valuable to combine with its own unique assets.

________occurs when a firm legally allows the right to produce its product, to use its production processes, or to use its brand name or trademark to another firm.

Which branch of economic theory seeks to explain why firms often prefer foreign direct investment over licensing as a strategy for entering foreign markets?

A French wind power company gives an Indonesian company the right to produce and sell wind turbines in return for a royalty fee on every unit sold. Which business practice is this an example of?

When transportation costs are added to production costs, it becomes unprofitable to ship some products over a large distance. This is particularly true of products that

________seeks to explain why firms often prefer foreign direct investment over licensing as a strategy for entering foreign markets.

________ gives a firm tight control over manufacturing, marketing, and strategy in a foreign country that may be required to maximize its profitability.

________ and its extensions can help to explain imitative FDI behavior by firms in oligopolistic industries.

Which of the following specifically reduces the viability of an exporting strategy specifically for products with low value-to-weight ratios?

Which of the following is a way in which governments increase the attractiveness of FDI and licensing relative to exporting?

Identify the theory that seeks to explain why firms often prefer foreign direct investment over licensing as a strategy for entering foreign markets.

In which of the following situations does the internalization theory recommend FDI as opposed to licensing?

Which of the following best describes an industry composed of a limited number of large firms?

Which of the following is a direct consequence of the interdependence between firms in an oligopoly?

Which of the following observations concerning Knickerbocker's theory is true?

What is the term that describes when two or more enterprises encounter each other in different regional markets, national markets, or industries?

Which of the following is a major drawback of using Knickerbocker's theory in explaining FDI?

The________suggests that a firm will establish production facilities where foreign assets or resource endowments that are important to the firm are located.

Advantages that arise from using resource endowments or assets that are tied to a particular place and that a firm finds valuable to combine with its own unique assets are known as

According to the________view of FDI, multinational enterprises (MNE) extract profits from the host country and take them to their home country, giving nothing of value to the host country in exchange.

Which view of FDI traces its roots to classical economics and the international trade theories of Adam Smith and David Ricardo?

Which political view allows FDI so long as the benefits outweigh the costs?

A country rejects FDI proposals in certain industries. It does so because the tangible advantages of such investments are lesser than potential costs like loss of employment and reduction of overall well-being. However, it aggressively pursues inviting foreign investments in sectors like infrastructure, education, and health care because of the benefits that accrue with them. Which political view of FDI is discussed in this example?

The country of Manystan has adopted neither a radical policy nor a free market policy, but rather one that posits that FDI has both benefits and costs. This is best described as

________ traces its roots to Marxist political and economic theory.

________ argues that FDI is a benefit to both the source country and the host country.

The pragmatic nationalist view highlights________ of FDI.

An aspect of________is the tendency to aggressively court FDI believed to be in the national interest by, for example, offering subsidies to foreign MNEs in the form of tax breaks or grants.

Recent years have seen a________in the number of countries that adhere to a radical ideology regarding FDI.

The free market view argues that international production should be distributed among countries according to the

According to pragmatic nationalist view, FDI should be allowed so long as

Why is it said that not all the new jobs created by FDI represent net additions in employment?

When a company brings capital and/or technology to a host country, the host country benefits from the

A country's________ keep track of its payments to and its receipts from other countries.

Host country citizens that are employed by an MNE following an FDI are an example of

A country's________ accounts keep track of both its payments to and its receipts from other countries.

If the FDI is a substitute for imports of goods or services, the effect can be to improve the________of the host country's balance of payments.

FDI can benefit the home country's________ if the foreign subsidiary creates demands for home-country exports of capital equipment, intermediate goods, complementary products, and the like.

Which of the following arises when a country is importing more goods and services than it is exporting?

In which of the following situations would FDI improve the current account of the host country's balance of payments?

In which way can the source country's balance of payments benefit from FDI made in a foreign country?

How is the adverse effect of the balance of payments for the home country due to FDI usually offset?

FDI undertaken to serve the home market is known as

How can FDI undertaken to serve the home market stimulate economic growth in the home country?

What is double taxation in the context of FDI?

Through their choice of policies, home countries can both encourage and restrict FDI by local firms. Policies designed to encourage outward FDI include which of the following?

The two most common methods of restricting inward FDI are ownership restraints and

Which of the following is a home-country policy aimed at restricting outward FDI flow?

________is essentially the service-industry version of licensing, although it normally involves much longer-term commitments.

From the perspective of a firm negotiating the terms of an investment with a host government, the firm's bargaining power is high when the

The________and Knickerbocker's theory of FDI tend to be less useful from a business perspective because they are descriptive rather than analytical.

As transportation costs or trade barriers increase, exporting becomes unprofitable, and the choice is between FDI and

Licensing would be a good option for firms in which of the following industries?