Foreign portfolio investment (FPI) is a special case of foreign direct investment (FDI).
True
False
Location-bound resources are resources that cannot be transferred from one country to another
True
False
A joint venture is a company is owned by two or more parent companies
True
False
The expectation of knowledge spillovers is a major motivation for governments to attract foreign investors to their country.
True
False
Multinational companies concerned about dissemination risk prefer to establish a licencing contract instead of a wholly owned subsidiary.
True
False
Reduced contract monitoring and enforcement costs are an example of an internalization advantage.
True
False
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
Obsolescing bargain
Resurgent bargain
Empowered negotiation
Resurgent negotiation
An FDI in which type of activity would be an example of upstream vertical FDI?
A sales and marketing office
A replication of the operation in the home country
An operation covering all stages of the value chain
A manufacturing facility for components of the firm’s main product
Which of the following is not an element of the OLI paradigm?
Locational advantages
Ownership advantages
Internalization advantages
All of the above answers are elements of the OLI paradigm.
A multinational enterprise is defined as an enterprise that
Has sales in more than one country
Has subsidiaries in more than one country
Has employees from more than one country
Is buying components in more than one country
Asset specificity refers to investments that are
specific to a business relationship
specific to a business function
specific to a country
specific to a product division
What is the relationship between the stock and flow of FDI
FDI flows are generated from FDI stock
Changes in FDI stock correspond to changes in FDI flows