Multinational Enterprises Overview

False (B)

<p>False (B)</p> Signup and view all the answers

<p>MNEs contribute to global economic integration through trade, investment and technology transfer.</p> Signup and view all the answers

<p>increases</p> Signup and view all the answers

<p>Foreign Direct Investment (FDI)</p> Signup and view all the answers

<p>sales</p> Signup and view all the answers

<p>Vertical MNE = Controls different stages of production across countries Horizontal MNE = Produces the same goods/services in multiple countries Conglomerate MNE = Operates in unrelated industries across countries</p> Signup and view all the answers

<p>Potential exploitation of labor and resources (C)</p> Signup and view all the answers

<p>Horizontal Diversification = Producing identical products in multiple countries Conglomerate Diversification = Expansion into unrelated markets Foreign Direct Investment = Investment in a foreign business International Joint Venture = Partnership between companies for limited objectives</p> Signup and view all the answers

<p>To achieve higher returns on investment. (C)</p> Signup and view all the answers

<p>False (B)</p> Signup and view all the answers

<p>Coca-Cola operates in over 200 countries with a centralized management structure.</p> Signup and view all the answers

<p>False (B)</p> Signup and view all the answers

<p>Global Value Chains (GVCs)</p> Signup and view all the answers

<p>FDI</p> Signup and view all the answers

<p>Minimization of risks through diversification (D)</p> Signup and view all the answers

<p>global</p> Signup and view all the answers

<p>Loss of domestic industries due to competition. (B)</p> Signup and view all the answers

<p>Having its headquarters in one country but operating in multiple countries (A)</p> Signup and view all the answers

<p>False (B)</p> Signup and view all the answers

<p>Technology transfer</p> Signup and view all the answers

<p>foreign direct</p> Signup and view all the answers

<p>Subsidiary = A company owned or controlled by another (parent) company. Parent Company = The main company that owns or controls subsidiaries in other countries. Host Country = A country where a subsidiary of an MNC operates. Globalization = The increasing global integration of economies and societies.</p> Signup and view all the answers

<p>Increased competition in local markets (A)</p> Signup and view all the answers

<p>False (B)</p> Signup and view all the answers

<p>Global value chain</p> Signup and view all the answers

<p>repatriation</p> Signup and view all the answers

<p>The pursuit of new markets and resources (D)</p> Signup and view all the answers

A company operating in multiple countries with activities like research and development, manufacturing, and services. They usually have a high ratio of foreign to total sales.

When a company invests directly in a foreign country to control assets, like factories or subsidiaries. Motivated by higher returns, market access, or cost reduction.

A partnership between companies to combine skills and assets for specific objectives, like research or production. Often used for accessing new markets or reducing costs.

The movement of people from one country to another for work or other reasons. It can redistribute income globally by moving labor from less productive to more productive sectors.

The increasing interconnectedness of economies through trade, investment, technology, and migration. It leads to global economic integration.

When a company chooses to produce components or intermediate goods in foreign subsidiaries for its final products. This is a type of multinational diversification.

When a company produces identical products in both its home country and its host countries. This is a type of multinational diversification.

When a company expands into unrelated markets, like a car manufacturer investing in electronics. This is a type of multinational diversification.

The comparison of opportunity costs between different ways of expanding business operations, like licensing and direct investment. It helps determine the most advantageous strategy.

A calculation that quantifies the increase in output when labor is moved from a less productive to a more productive sector, representing the gains from labor mobility.

Companies that conduct business operations in multiple countries, facilitating international trade, investment, and production, and significantly contributing to economic globalization.

MNEs that control different stages of production, from raw materials to processing, in different countries.

MNEs that produce and sell the same goods or services in various countries, targeting local markets.

MNEs operating in unrelated industries across countries to diversify their business portfolio and minimize risks.

The flow of goods and services across international borders, often involving specialized tasks and division of labor among countries, facilitating economic integration.

Investments made by a company in a foreign country, contributing to economic growth and integration.

MNEs can create jobs, attract investment, and foster economic integration by connecting countries through global value chains.

MNEs can transfer advanced technologies and management practices to host countries, promoting innovation and development.

MNEs can face challenges like navigating diverse regulations, taxation, and cultural differences while operating globally.

MNEs can potentially exploit workers and resources in developing countries, raising ethical concerns.

A company that operates in multiple countries, performing activities like research, manufacturing, and providing services. They often have a significant portion of their sales coming from outside their home country.

Investments made by a company in a foreign country to gain control of assets like factories or subsidiaries. This is done to get higher returns, access new markets, or reduce costs.

A partnership between two or more companies from different countries to combine their skills and resources to achieve a specific goal, like research or production. Often used to enter new markets or cut costs.

The movement of people between countries for work or other reasons. This can shift income globally by moving workers from less productive to more productive locations.

A type of multinational diversification where a company focuses on producing components or intermediate goods in foreign subsidiaries for its final products. This is done to take advantage of lower production costs.

A type of multinational diversification where a company produces identical products in both its home country and its host countries. This is done to increase market share and capture new customer bases.

A type of multinational diversification where a company expands into unrelated markets, like a car manufacturer investing in electronics. This helps reduce risk by spreading investments across different industries.

The process of comparing the costs and benefits of different ways to expand a business globally. This helps companies decide whether to license their technology, enter a joint venture, or make a direct investment.

A formula that measures the increase in output when labor is moved from a less productive to a more productive sector. This quantifies the benefits of labor mobility.

The increasing interconnectedness of economies through trade, investment, technology, and migration, leading to global economic integration. It affects companies, individuals, and the global economy.