1) historically, the product life-cycle theory seems to be an inaccurate explanation of
international trade patterns.
2) licensing gives a firm tight control over manufacturing, marketing, and strategy in a
foreign country that may be required to maximize its profitability.
3) profitability can be defined as the rate of return that the firm makes on its invested
capital, which is calculated by dividing the total sales of the firm by total invested
capital.
4) by pooling its cash reserves, a firm can reduce the total size of the cash pool it must
hold in highly liquid accounts.
5) a product’s value-to-weight ratio affects the firm’s transportation costs.
6) once barriers to trade and investment are removed, companies can treat a group of
integrated countries as a single market and produce standardized products for it.
7) by lowering production costs, subsidies help domestic producers compete against
foreign imports and gain export markets.
8) a knowledge network is a network for transmitting information within an
organization that is based on formal organizational structure.
9) the rule of law minimizes corruption in all countries.
10) in a fronting loan, the parent company lends cash directly to the foreign subsidiary,
and the subsidiary repays it later.