Chapter 17 - Chapter 17 Corporate Strategy and Foreign...

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Chapter 17 Corporate Strategy and Foreign Direct Investment 1. The United States Department of Commerce defines foreign direct investment as investment in either real capital assets or financial assets with a minimum of % equity ownership in a foreign firm. * A. 10 B. 20 C. 30 D. 50 E. 60 2. Which of the following is not an oligopoly-created advantage of foreign direct investment for investing companies? A. proprietary technology B. management know-how C. access to scarce raw materials * D. political advantage E. financial economies of scale 3. Which of the following is not directly related to benefits of foreign direct investment to host countries? A. foreign investment induces the transfer of technology B. foreign investment increases national employment C. foreign investment contributes to tax revenues D. foreign investment provides local workers with an opportunity to learn managerial skills * E. foreign investment creates jobs for foreigners 4. Which of the following is not part of the argument against foreign investment for host countries? A. foreign investment brings about the loss of political and economic sovereignty B. foreign investment exploits local natural resources C. foreign investment undermines local indigenous cultures * D. foreign investment lowers local wages E. foreign investment controls key industries and export markets 5. Which of the following is not an advantage of foreign licensing arrangement over foreign investment? A. licensing requires a relatively small amount of investment B. licensing has relatively lower risk C. companies obtain an opportunity to penetrate foreign markets. * D. licensing may create a possible competitor E. licensing is an easy way to circumvent foreign government restrictions 6. Modes of foreign direct investments do not include the following .
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A. construction of new plants abroad * B. exports C. mergers and acquisitions of foreign firms D. international joint ventures E. international equity alliances 7. Construction of new plants abroad requires demand forecast. Such a demand forecast does not depend on the following ___. * A.
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This note was uploaded on 02/16/2012 for the course FIN 7023 taught by Professor Wald during the Spring '12 term at The University of Texas at San Antonio- San Antonio.

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Chapter 17 - Chapter 17 Corporate Strategy and Foreign...

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