Topic 8 FDI

FPI refers to the _____.

• direct, hands-on management of foreign assets

• amount of FDI moving in a given period in a certain direction

• ability of a firm to engage in downstream stage of the value chain in a host country

• investment in a portfolio of foreign securities that do not entail the active management of foreign assets

_____ is a type of FDI in which a firm duplicates its home country-based activities at the same value chain stage in a host country.

• Horizontal FDI

• Vertical FPI

• Backward vertical FDI

• Platform FDI

Harton, a car manufacturer based in UK, only assembles cars and does not manufacture components in the UK. But in France, Harton enters into components manufacturing through FDI. Harton’s investment in France would be an example of a(n) _____.

• FPI

• downstream vertical FDI

• upstream vertical FDI

• horizontal FDI

A vertical FDI refers to a type of FDI in which _____.

• a firm duplicates its home country-based activities at the same value chain stage in a host country

• a firm invests in a portfolio of foreign securities but without active management of those foreign assets

• a firm moves upstream or downstream at different value chain stages in a host country

• d.

  a firm produces the same products or services in a host nation as it does at home

   

OLI advantages refer to a firm’s quest for _____via FDI.

• oligopolistic advantages, laissez-faire advantages, and intrafirm trade advantages

• outsourcing advantages, licensing advantages, and importing advantages

• organization advantages, leadership advantages, and innovation advantages

• ownership advantages, location advantages, and internalization advantages

MNEs' possession and leveraging of certain valuable, rare, hard-to-imitate, and organizationally embedded (VRIO) assets overseas in the context of FDI refer to _____.

• location

• ownership

• internalization

• market imperfections

_____ refers to the replacement of cross-border markets with one firm locating in two or more countries.

• Location advantage

• Ownership advantage

• Internalization

• Agglomeration

Firms prefer FDI to licensing because FDI_____.

• increases the chances of opportunism when dealing with a host nation entity

• requires complete dissemination of technological know-how to host nation entity

• protects the firm from economic agglomeration

• provides the firm with direct ownership to its foreign assets

_____ refers to the clustering of economic activities in certain locations.

• Internalization

• Expropriation

• Agglomeration

• Intrafirm trade

Which of the following political views treats FDI as an instrument of imperialism and as a vehicle for exploitation of domestic resources by foreign capitalists and firms?

• Pragmatic nationalism

• The free-market view

• The radical view

• The monopolistic view