Question 1

The expectation of knowledge spillovers is a major motivation for governments to attract foreign investors to their country.

Accepted Answer

A) True 
 B)False

Question 2

The shift in the relative bargaining power between MNEs and host governments after the foreign investor incurred the sunk costs of their initial investment is known as:

Accepted Answer

A)  Obsolescing bargain
B)  Resurgent bargain
C)  Empowered negotiation
D)  Resurgent negotiationE) All of the above
F) A) and D)

Question 3

Horizontal FDI is when a firm moves upstream or downstream in different value chain stages in a host country.

Accepted Answer

A) True 
 B)False

Question 4

What is the relationship between the stock and flow of FDI?

Accepted Answer

A)  FDI flows are generated from FDI stock
B)  Changes in FDI stock correspond to changes in FDI flows
C)  FDI stock adds to FDI flows
D)  FDI flows add to the FDI stockE) All of the above
F) None of the above

Question 5

Which statement holds true about state-owned enterprises?

Accepted Answer

A)  The majority of big multinational enterprises from EU countries are in state ownership
B)  Sovereign wealth funds are the only important form of state-owned enterprises that invest abroad directly
C)  State-owned enterprises from non-EU countries are not allowed to invest in the EU
D)  State-owned enterprises play an important role in FDI from emerging economiesE) None of the above
F) A) and B)

Question 6

Reduced contract monitoring and enforcement costs are an example of an internalization advantage.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is not an element of the OLI paradigm?

Accepted Answer

A)  Locational advantages
B)  Ownership advantages
C)  Internalization advantages
D)  All of the above answers are elements of the OLI paradigm.E) B) and C)
F) A) and D) D

Question 8

Multinational companies concerned about dissemination risk prefer to establish a licencing contract instead of a wholly owned subsidiary.

Accepted Answer

A) True 
 B)False  False

Question 9

An FDI in which type of activity would be an example of upstream vertical FDI?

Accepted Answer

A)  A sales and marketing office
B)  A replication of the operation in the home country
C)  An operation covering all stages of the value chain
D)  A manufacturing facility for components of the firm's main productE) B) and C)
F) A) and D)

Question 10

Assets specificity refers to investments that are:

Accepted Answer

A)  Specific to a business relationship
B)  Specific to a business function
C)  Specific to a country
D)  Specific to a product divisionE) All of the above
F) A) and D)

Question 11

Location-bound resources are resources that cannot be transferred from one country to another.

Accepted Answer

A) True 
 B)False

Question 12

Foreign portfolio investment (FPI)is a special case of foreign direct investment (FDI).

Accepted Answer

A) True 
 B)False

Question 13

A multinational enterprise is defined as an enterprise that:

Accepted Answer

A)  Has sales in more than one country
B)  Has employees from more than one country
C)  Has subsidiaries in more than one country
D)  Is buying components in more than one countryE) None of the above
F) B) and C)

Question 14

A joint venture is a company owned by one parent company.

Accepted Answer

A) True 
 B)False  False

Exam 5: Trading Internationally

The expectation of knowledge spillovers is a major motivation for governments to attract foreign investors to their country.

Correct Answer
verified

The shift in the relative bargaining power between MNEs and host governments after the foreign investor incurred the sunk costs of their initial investment is known as:

Correct Answer
verified

Horizontal FDI is when a firm moves upstream or downstream in different value chain stages in a host country.

Correct Answer
verified

What is the relationship between the stock and flow of FDI?

Correct Answer
verified

Which statement holds true about state-owned enterprises?

Correct Answer
verified

Reduced contract monitoring and enforcement costs are an example of an internalization advantage.

Correct Answer
verified

Which of the following is not an element of the OLI paradigm?

Correct Answer
verified
D

Multinational companies concerned about dissemination risk prefer to establish a licencing contract instead of a wholly owned subsidiary.

Correct Answer
verified
False

An FDI in which type of activity would be an example of upstream vertical FDI?

Correct Answer
verified

Assets specificity refers to investments that are:

Correct Answer
verified

Location-bound resources are resources that cannot be transferred from one country to another.

Correct Answer
verified

Foreign portfolio investment (FPI)is a special case of foreign direct investment (FDI).

Correct Answer
verified

A multinational enterprise is defined as an enterprise that:

Correct Answer
verified

A joint venture is a company owned by one parent company.

Correct Answer
verified
False

Exam 5: Trading Internationally

The expectation of knowledge spillovers is a major motivation for governments to attract foreign investors to their country.

Correct AnswerverifiedShow Answer

The shift in the relative bargaining power between MNEs and host governments after the foreign investor incurred the sunk costs of their initial investment is known as:

Correct AnswerverifiedShow Answer

Horizontal FDI is when a firm moves upstream or downstream in different value chain stages in a host country.

Correct AnswerverifiedShow Answer

What is the relationship between the stock and flow of FDI?

Correct AnswerverifiedShow Answer

Which statement holds true about state-owned enterprises?

Correct AnswerverifiedShow Answer

Reduced contract monitoring and enforcement costs are an example of an internalization advantage.

Correct AnswerverifiedShow Answer

Which of the following is not an element of the OLI paradigm?

Correct AnswerverifiedD

Multinational companies concerned about dissemination risk prefer to establish a licencing contract instead of a wholly owned subsidiary.

Correct AnswerverifiedFalse

An FDI in which type of activity would be an example of upstream vertical FDI?

Correct AnswerverifiedShow Answer

Assets specificity refers to investments that are:

Correct AnswerverifiedShow Answer

Location-bound resources are resources that cannot be transferred from one country to another.

Correct AnswerverifiedShow Answer

Foreign portfolio investment (FPI)is a special case of foreign direct investment (FDI).

Correct AnswerverifiedShow Answer

A multinational enterprise is defined as an enterprise that:

Correct AnswerverifiedShow Answer

A joint venture is a company owned by one parent company.

Correct AnswerverifiedFalse

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
D

Correct Answer
verified
False

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
False