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Questions and Answers
What does the country-of-origin effect involve?
What does the country-of-origin effect involve?
Which strategy involves reducing risk by diversifying investments across different markets?
Which strategy involves reducing risk by diversifying investments across different markets?
Which of the following concepts is related to how companies might behave in multiple markets?
Which of the following concepts is related to how companies might behave in multiple markets?
What is a method of stabilization in which a currency's value is tied to another currency?
What is a method of stabilization in which a currency's value is tied to another currency?
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Which term describes the interconnectedness of firms across different markets leading to competitive strategies?
Which term describes the interconnectedness of firms across different markets leading to competitive strategies?
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What is the impact of mutual forbearance on market competition?
What is the impact of mutual forbearance on market competition?
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Which term describes an agreement to exchange currencies at a set rate and date?
Which term describes an agreement to exchange currencies at a set rate and date?
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Which view suggests a focus on the influence of long-term historical context in foreign market entry?
Which view suggests a focus on the influence of long-term historical context in foreign market entry?
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What technique is primarily used to offset the risk of currency fluctuations?
What technique is primarily used to offset the risk of currency fluctuations?
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How does market commonality influence competitive dynamics?
How does market commonality influence competitive dynamics?
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What does the resource-based view imply that foreign firms must consider when entering a market?
What does the resource-based view imply that foreign firms must consider when entering a market?
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Which of the following strategies is focused on balancing potential gains and risks in international investments?
Which of the following strategies is focused on balancing potential gains and risks in international investments?
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Which view describes the fluctuations in foreign market strategies as a pendulum swing between different approaches?
Which view describes the fluctuations in foreign market strategies as a pendulum swing between different approaches?
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Which of the following views is primarily concerned with the impact of newly emerging factors on market strategies?
Which of the following views is primarily concerned with the impact of newly emerging factors on market strategies?
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In the context of foreign market entry, which view emphasizes historical interpretations of market processes?
In the context of foreign market entry, which view emphasizes historical interpretations of market processes?
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How does the resource-based view of global business fundamentally differ from the institution-based view?
How does the resource-based view of global business fundamentally differ from the institution-based view?
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What key factor does the resource-based view prioritize in global business strategy?
What key factor does the resource-based view prioritize in global business strategy?
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Which of the following is not considered a component of the resource-based view?
Which of the following is not considered a component of the resource-based view?
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In the context of global business, the institution-based view primarily considers what aspect?
In the context of global business, the institution-based view primarily considers what aspect?
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What is a common criticism of the institution-based view in global business?
What is a common criticism of the institution-based view in global business?
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What is the primary goal of deploying overwhelming resources and capabilities in a foreign market?
What is the primary goal of deploying overwhelming resources and capabilities in a foreign market?
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Which of the following is crucial for understanding in international business?
Which of the following is crucial for understanding in international business?
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What aspect should businesses consider regarding their actions in foreign markets?
What aspect should businesses consider regarding their actions in foreign markets?
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Which theory assumes that the wealth of the world is fixed?
Which theory assumes that the wealth of the world is fixed?
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What can be a consequence of failing to understand foreign cultures in business?
What can be a consequence of failing to understand foreign cultures in business?
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Why is it important for firms to act legitimately in the markets they enter?
Why is it important for firms to act legitimately in the markets they enter?
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What should companies focus on when offsetting their liabilities of foreignness?
What should companies focus on when offsetting their liabilities of foreignness?
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Which of the following practices is essential when entering new foreign markets?
Which of the following practices is essential when entering new foreign markets?
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What is a primary factor that affects exchange rates?
What is a primary factor that affects exchange rates?
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What does it mean for a currency's value to fluctuate?
What does it mean for a currency's value to fluctuate?
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Which of the following best describes a gold standard?
Which of the following best describes a gold standard?
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Selective government intervention in exchange rates typically implies what?
Selective government intervention in exchange rates typically implies what?
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Efficiency-seeking firms often target countries that have which of the following?
Efficiency-seeking firms often target countries that have which of the following?
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What role does supply and demand play in determining exchange rates?
What role does supply and demand play in determining exchange rates?
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In the context of financial markets, what does it mean for exchange rates to be linked to a gold standard?
In the context of financial markets, what does it mean for exchange rates to be linked to a gold standard?
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Which statement best defines a currency that fluctuates according to foreign exchange rates?
Which statement best defines a currency that fluctuates according to foreign exchange rates?
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Study Notes
OLI Advantages
- OLI advantages are a firm's quest for FDI (Foreign Direct Investment).
- They include ownership advantages, location advantages, and internalization advantages.
Market Commonality
- Market commonality occurs when a firm attacks a competitor's other markets if that competitor attacks the firm's original market.
Country-of-Origin Effect
- The country-of-origin effect refers to the positive or negative perception of firms and products from a specific country.
Mercantilism
- Mercantilism views international trade as a zero-sum game.
Emerging Economies
- The term "emerging economies" replaces "developing countries" or "first-world markets"
Currency Hedging
- Currency hedging refers to non-financial companies spreading activities across currency zones to offset currency losses in specific regions.
FDI Costs to Host Countries
- One cost to host countries of FDI is capital outflow and job loss.
- Other costs include loss of sovereignty, increased competition, and an increase in local competition.
Import Quotas
- Import quotas are restrictions on the quantity of imports.
Trade Deficit
- A trade deficit occurs when a nation imports more than it exports.
Resource-Based View vs. Institution-Based View
- The resource-based view focuses on the internal strengths of a firm.
- The institution-based view focuses on understanding the laws and values in a host nation.
Modes of Entry
- Equity modes involve the establishment of independent organizations overseas (indicate larger, harder to reverse commitments).
- Non-equity modes do not require overseas organization establishment.
First-Mover Advantages
- First-mover advantages include, avoidance of clash with a dominant firm and the opportunity to free ride on second mover investments.
- Also, resolving technological and market uncertainty.
Import Quotas
- Import quotas are a type of nontariff barrier.
Antidumping Duties
- Antidumping duties are tariffs levied on imports sold below costs to drive domestic firms out of business.
Classical Theory of International Trade
- Comparative advantage theory is a classical international trade theory.
Scale of Entry
- Scale of entry refers to the amount of resources committed to entering a foreign market.
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Description
Explore key concepts in international business including OLI advantages, market commonality, the country-of-origin effect, and more. This quiz covers essential principles that influence foreign direct investment and international trade. Test your understanding of these vital business concepts!
