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91. Which of the following statements is most likely to be true regarding the effects of FDI on employment?
92. Direct effects of FDI on employment in the host country arise when a foreign MNE:
93. Indirect effects of FDI on employment in a host country arise when:
94. Which of the following are national accounts that track both payments to and receipts from other countries?
95. Which account in the balance of payments records transactions involving the export and import of goods
and services?
96. A current account deficit is also known as a(n):
97. When a country is importing more goods and services than it is exporting, it is incurring a(n):
98. Which of the following is the only way to support a current account deficit in the long run?
99. Which of the following is most likely to be the effect of FDI in the form of a greenfield investment on the
host country?
100. Which of the following statements is most likely to be true regarding the adverse effects of FDI on the host
country?
101. The most important concerns regarding the costs of FDI for the home country center on the:
102. Offshore production refers to FDI undertaken:
103. Which of the following is a major type of foreign investment risk that is insurable through
government-backed programs?
104. As an incentive to encourage domestic firms to undertake FDI, many countries have:
105. Which of the following is a home-country policy for limiting outward FDI?
106. To encourage inward FDI, it is increasingly common for governments to:
107. Host governments use a range of controls to restrict inward FDI. The two most common are:
108. Which of the following is NOT an option, due to the fact that many services have to be produced where
they are sold?
109. Firms for which licensing is not a good option include those in:
110. Although it normally involves much longer-term commitments, franchising is essentially the service
industry version of:
111. What is meant by the term foreign direct investment? Describe the difference between the flow of foreign
direct investment and the stock of foreign direct investment.
112. "Firms prefer to acquire existing assets rather than undertake greenfield investments while contemplating
FDI." Explain the reasons that support this argument.
113. Despite its advantages, FDI has been described as an "expensive" and "risky" international growth
strategy. Other things being equal, why is FDI expensive and risky when compared to licensing and exporting?
114. When a firm exports, it need not bear the costs associated with FDI, and it can reduce the risks associated
with selling abroad by using a native sales agent. Exporting, however, is not without its limitations. Discuss the
most common limitations of exporting as compared to FDI.
115. In the context of the internalization theory, explain why licensing may not be an attractive option.
116. Under what circumstances will a firm favor foreign direct investment over exporting as an entry strategy?
117. Describe Dunning's arguments regarding the location-specific advantages.
118. In the context of FDI, describe the political ideologies of the radical view, the free market view, and
pragmatic nationalism.
119. Briefly describe the changes taking place in the attitudes toward FDI in countries across the globe.
120. Briefly describe the benefits of inward FDI for a host country that arise from employment effects and
balance-of-payments effects.
121. What are the benefits of FDI to the home (source) country?
122. How can governments restrict the outward flow of FDI?
123. Describe the role of the WTO in the liberalization of FDI.
124. What are the different types of industries for which licensing is not a good option?
125. What is franchising? With the help of a suitable example, explain how franchising can be a profitable
alternative to FDI.
