A) exporting from the home country.
B) licensing production to a local firm in the host country.
C) ignoring the foreign market.
D) all of the above
F) C) and D)
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A) are obtained when the acquiring firm is greater in value than the stand-alone valuations of the target firm(s) .
B) can only be obtained by increases in market power.
C) are obtained when the value of the combined firm is greater than the stand-alone valuations of the individual (acquiring and target) firms.
D) none of the above
F) B) and C)
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A) Subsequently, Maharashtra invited Enron to renegotiate its contract.
B) The lack of an effective means of enforcing contracts in a foreign country is clearly a major source of political risk associated with FDI.
C) In an effort to pressure Maharashtra to reverse its decision, Enron "pushed like hell" the U.S.Energy Department to make a statement in June 1995 to the effect that canceling the Enron deal could adversely affect other power projects.The statement only compounded the situation.The BJP politicians immediately criticized the statement as an attempt by Washington to bully India.
D) All of the above
F) None of the above
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A) workers are not allowed to freely move across national boundaries to seek higher wages.
B) some countries do a bad job of educating their work force, consequently they are not very productive.
C) in some countries there is a shortage of capital investment.
D) all of the above are equally important
F) A) and C)
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A) (i) , (ii) , (iii) , and (iv)
B) (v) , (vi) , (vii) , and (viii)
C) a) and b)
D) none of the above
F) C) and D)
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A) the firm's cash flows are internationally hedged.
B) thus, shareholders of the firm can indirectly benefit from international diversification even if they are not directly holding foreign shares.
C) thus, shareholders of the firm can directly benefit from international diversification even if they are not directly holding foreign shares.
D) none of the above
F) A) and C)
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A) the host country's policies affecting the local operations of an MNC.
B) the host country's policy regarding ownership and control of local operations.
C) cross-border flows of capital, payment, know-how, and the like.
D) none of the above
F) A) and B)
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A) selling off divisions that fall outside the scope of their core competence.
B) acquiring strategic assets that reduce their competitiveness.
C) firms can better leverage their intangible assets and on a larger scale through licensing.
D) none of the above
F) All of the above
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A) Investors may often encounter demands for bribes from politicians and government officials for contracts and smooth bureaucratic processes.
B) If companies refuse to make grease payments, they may lose business opportunities or face difficult bureaucratic red tape.
C) They may risk violating laws or being embarrassed when the payments are discovered and reported in the media.
D) All of the above
F) A) and B)
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A) This is consistent with the finding that the market value of the firm is positively related to its multinationality because of the firm's intangible assets, such as R&D capabilities, with public good nature.
B) It is not the multinationality per se that contributes to the firm's value.
C) Their empirical findings support the (forward-) internalization theory of FDI.
D) All of the above
F) All of the above
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A) adjusting a foreign investment project's NPV by either reducing its expected cash flows, or by increasing the cost of capital.
B) forming joint venture with a local company.
C) purchase insurance against the hazard of political risk.
D) all of the above
F) A) and C)
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A) the United States.
B) Japan.
C) China.
D) Mexico.
F) C) and D)
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A) China received the largest amount of FDI inflows.
B) India received the largest amount of FDI inflows.
C) Mexico received the largest amount of FDI inflows.
D) the United States received the largest amount of FDI inflows.
F) None of the above
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A) MNCs are making a mistake in this case and will have to eventually withdraw.
B) MNCs should have significant advantages over local firms such as comparative advantages due to intangible assets.
C) the local firms will not have to compete due to their inherent advantages over the foreigners.
D) none of the above
F) A) and C)
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A) The world FDI stock grew twice as fast as worldwide exports of goods and services.
B) The world FDI stock grew at the same rate as worldwide exports of goods and services.
C) The world FDI stock grew half as fast as worldwide exports of goods and services.
D) None of the above
F) B) and D)
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A) Upon the news release of the project cancellation, Enron's share price fell immediately by about 10 percent.
B) In the process of structuring the deal, Enron made a profound political miscalculation: Instead of waiting for the next election results, Enron rushed to close the deal and began construction, apparently believing that a new government would find it difficult to unwind the deal when construction was already under way.
C) Enron had the last laugh, however when they went bankrupt and left the power plant unfinished.
D) All of the above
F) All of the above
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A) takes the form of cross-border mergers and acquisitions.
B) takes the form of Greenfield investment.
C) is initiated by governments.
D) none of the above
F) A) and D)
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A) building new production facilities in a foreign country.
B) buying existing foreign business.
C) both a) and b)
D) none of the above
F) None of the above
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A) tend to directly own oil fields, mine deposits, and forests.
B) tend to lease their oil fields, mine deposits, and forests.
C) tend to partner with local firms, leveraging their intangible assets.
D) none of the above
F) B) and D)
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A) because workers are not allowed to freely move across national boundaries to seek higher wages.
B) because among all factor markets, the labor market is the most imperfect.
C) because workers may choose to not move across national boundaries to seek higher wages due to the cultural differences.
D) all of the above
F) None of the above
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