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51. FDI is risky because of the problems associated with:
52. The viability of an exporting strategy is often constrained by transportation costs, particularly of products
that can be produced in almost any location and have a:
53. Which of the following is one of the limitations of exporting that leads companies to prefer FDI over
exporting?
54. A firm will favor FDI over exporting as an entry strategy when:
55. Which of the following products has a low value-to-weight ratio?
56. A firm that does not want to bear the costs of establishing production facilities in a foreign country should
avoid:
57. Governments impose quotas to limit:
58. The argument that firms prefer FDI over licensing to retain control over know-how, manufacturing,
marketing, and strategy or because some firm capabilities are not amenable to licensing constitutes the:
59. The market imperfections approach seeks to explain:
60. According to internalization theory:
61. According to internalization theory, one of the drawbacks of licensing is that:
62. A firm is most likely to favor foreign direct investment over exporting when:
63. The strategic behavior theory:
64. The cement market in Erbia is dominated by four firms. These firms control 85 percent of selling and
buying of the domestic market. Which of the following terms explains the market structure of the cement
industry in Erbia?
65. A critical competitive feature of an oligopoly is the:
66. If one firm in an oligopoly cuts prices, then most likely, its competitors will:
67. The interdependence between firms in an oligopoly leads to:
68. QFresh, a brand for energy drinks, launched a healthy lime-based drink without preservatives. Immediately
after this another brand, Fast Fizz, which manufactures energy drinks, also announced the launch of a new
refreshing drink without preservatives. Then Ignite, a third brand of energy drinks, reduced the price of its
apple-based drink. Which of the following is most likely to happen in this oligopolistic market setup?
69. Which of the following arises when two or more enterprises encounter each other in different regional
markets, national markets, or industries?
70. The idea behind multipoint competition is to ensure that:
71. The difference between Internalization theory and imitative theory is that:
72. Which of the following concepts helps explain how location factors affect the direction of FDI?
73. Location-specific advantages for a firm are those that arise from:
74. Which of the following is true about Dunning's arguments?
75. Silicon Valley in California is the world center for the computer and semiconductor industry and has many
of the world's major computer and semiconductor companies located close to each other, thus offering the
location-specific advantage of:
76. Dunning's theory helps explain:
77. Which view of FDI traces its roots to Marxist political and economic theory?
78. Radical writers argue that:
79. According to the radical view of FDI, multinational enterprises (MNEs) that already exist in a country
should be:
80. Which of the following is a reason for the decline in the popularity of the radical view of FDI?
81. Which view argues that international production should be distributed among countries according to the
theory of comparative advantage?
82. According to the free market view, how does FDI increase the efficiency of the world economy through
MNEs?
83. Which of the following statements regarding the free market view is true?
84. The pragmatic nationalist view is that:
85. Many host countries are concerned that a foreign-owned manufacturing plant may import many components
from its home country, which has negative implications for the host country's:
86. According to which of the following, FDI has both benefits and costs and should be allowed only if the
benefits outweigh the costs?
87. The tendency to aggressively court FDI believed to be in the national interest of a country is an aspect of:
88. Which of the following is true regarding the pragmatic nationalist view of FDI?
89. The main benefits of inward FDI for a host country arise from:
90. Foreign managers trained in the latest management techniques can often help to improve the efficiency of
operations in the host country, whether those operations are acquired or greenfield developments. This benefit
of FDI falls into the category of:
