10 Questions
What does globalization have to do with the rise of market capitalization around the world?
It has increased trade in goods and services, exchange of money, information, and ideas, and growing similarity in laws, rules, norms, values, and ideas across countries
According to Michael Porter's diamond of national advantage, which of the following is not one of the four key determinants of why some nations and their industries outperform others?
Government policies
What is a key characteristic of factors of production according to the passage?
They must be rare, valuable, difficult to imitate, and rapidly and efficiently deployed
How do demanding consumers in a country drive firms in that country to perform better?
Demanding consumers drive firms to meet high standards, upgrade existing products and services, create innovative products and services, and better anticipate future global demand
What is a key benefit of related and supporting industries according to the passage?
They provide a competitive supplier base that reduces manufacturing costs and allows for close working relationships and joint R&D
Why might a company decide to become a multinational firm?
To increase the size of potential markets, attain economies of scale, and take advantage of arbitrage opportunities at various stages of the value chain
What is a key risk that multinational firms face due to political factors?
Destruction of property, disruption of operations, non-payment for goods and services, and arbitrary government decisions
What is a key hidden cost of offshoring according to the passage?
All of the above
How does global dispersion of value chains help multinational firms manage economic risk?
It spreads the firm's various activities across several countries and continents via outsourcing and offshoring
Which of the following is not a key determinant of national advantage according to Michael Porter's diamond model?
Government intervention
Explore the concept of globalization and how it influences market capitalization, international exchanges, trade, and cultural exchange. Understand Michael Porter's theory of national advantage and its implications for balancing emerging markets with developed markets.
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