Foreign Direct Investment and Ventures

Which of the following is a trend seen in the modern international economy?

Foreign direct investment is the least risky entry strategy.

International portfolio investment refers to a firm's direct control of foreign operations and is an equity-based method of foreign market entry.

The rate of inflation is a(n) ______ factor to be considered while selecting the location for FDI.

Which of the following must be considered in selecting foreign direct investment locations?

Which of the following best explains why some service industry firms most likely enter foreign markets through FDI?

Which of the following best exemplifies corporate social responsibility?

Which of the following represents an infrastructural factor that firms must consider when selecting an FDI location?

Which of the following represents a human resource factor that firms must consider when selecting an FDI location?

The level of taxes in a country is a part of the ______ factor that is considered when selecting an FDI location.

International portfolio investment refers to passive ownership of foreign securities.

A firm most likely enters the home market of a foreign competitor in order to ______

Which of the following is an example of a market-seeking motive for FDI?

Which of the following is the most likely motive behind firms in the mining industry wanting to enter new foreign markets?

A firm that pursues foreign direct investment to take advantage of government incentives is demonstrating a(n) ______ motive.

A firm that pursues a collaborative venture to access raw materials is demonstrating a(n) ______ motive.

Which of the following industries considers proximity to customers especially important in the decision to enter a foreign market?

New markets, new resources, and improved efficiency are the three main motives for firms to enter foreign markets through FDI.

Avoiding trade barriers is classified as a market-seeking motive for FDI.

The existence of a substantial market motivates many firms to produce offerings at or near customer locations.

Firms often follow their key customers abroad to preempt other vendors from serving them.

The strategic purpose behind firms competing with rivals in their own market is to force them to expend resources and thus, defend the firm's own market.

Companies opt for FDI to obtain advantages associated with locating at the hub of knowledge development and innovation in a given industry.

Economies of scale are decreases in per-unit cost of production resulting from decreasing output.

International expansion invariably results in a decrease in a firm's economies of scale.

Compared to small firms, large companies usually can access capital at lower cost.

In the context of attaining economies of scope, using individual managers in each European country is more efficient that using the same base of managers all over Europe.

In the fashion industry, customer needs change rapidly and managers often locate factories or assembly operations near important customers.

Governments encourage inward FDI because it transfers skill and technologies.

Explain why FDI is a particularly risky foreign entry strategy. How is FDI different from international portfolio investment?

International portfolio investment is characterized by ______

Firms that anticipate close public scrutiny of their foreign operations often avoid potential difficulties by ______

Tariff and other trade barriers for exports and FDI are identical.

By establishing a physical presence inside a country or an economic bloc, the foreign company obtains the same advantages as local firms.

Firms that engage in FDI avoid problematic trade barriers because the physical presence of a foreign firm earns it the same privileges as a local firm.

A merger is a special type of acquisition.

Vertical integration is an arrangement in which the firm owns, or seeks to own, the activities performed in a single stage of its value chain.

Explain why MNEs prefer acquisition instead of greenfield FDI. Why do foreign governments encourage greenfield FDI?

Explain the difference between vertical FDI and horizontal FDI. Provide an example that illustrates the difference between vertical and horizontal integration.

Which of the following is a characteristic of project-based, non-equity ventures?

Which of the following is a disadvantage of equity joint ventures?

A consortium is defined as ______

Which of the following is a characteristic of an equity joint venture?

A(n) ______ is a project-based, usually nonequity venture initiated by multiple partners to fulfill a large-scale project.

Which of the following is a key reason that a focal firm would most likely enter a collaborative venture with a foreign firm?

Discuss three reasons for firms seeking new market opportunities. Illustrate each with an example of a firm that sought a new foreign market for that particular motive.

Discuss resource and asset-seeking motives for FDI. Why might a company favor acquisition over greenfield investment as an FDI approach?

A firm that develops the capacity to sell its products by investing in marketing and selling operations is ______

A firm that owns the activities performed in a single stage of its value chain is demonstrating ______

Discuss the four key differences between project-based, nonequity ventures and equity ventures.

Cross-licensing agreements are a type of project-based, nonequity venture in which the partners agree to allow access to licensed intellectual property developed by the other on preferential terms.

Equity joint ventures have the simplest management structure.

FDI is the most advanced and complex foreign market entry strategy.

A form of collaboration between two firms to form a new, jointly owned enterprise is defined as a joint venture.

FDI is also known as international portfolio investment.

Which of the following terms is used to refer to a focal firm's partial ownership of an existing firm?

Collaborative ventures benefit SMEs by providing them with ______

A(n) ______ is a special type of acquisition in which two companies join to form a larger firm.

The purchase of an existing company or facility is known as a(n) ______

A(n) ______ is the purchase of an existing company or facility.

An arrangement whereby the firm owns, or seeks to own, multiple stages of a value chain for producing, selling, and delivering a product or service is termed as ______

How does the acquisition of a foreign company most likely benefit a focal firm in the foreign market?

Foreign Direct Investment (FDI)

Collaborative Venture

Market-Seeking Motive

Efficiency-Seeking Motive

Resource-Seeking Motive

Greenfield FDI

Acquisition FDI

Vertical Integration

Horizontal Integration

Project-Based Venture

Equity Joint Venture

Consortium

Cross-Licensing Agreement

Greenfield Investment

Acquisition

Equity Participation

Wholly Owned Direct Investment

Acquiring Downstream Value-Chain Facilities

Acquiring Upstream Value-Chain Facilities

Centralization

Decentralization

Asset-Seeking Motive

Greenfield Investment

Project-Based, Non-Equity Venture

Equity Joint Venture

Merger

Consortium

Cross-Licensing Agreement

Equity Participation

Wholly Owned Direct Investment