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 options
F) None of the above
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A) they exited the market.
B) Honda was motivated to circumvent the trade barriers.
C) Honda's FDI may have been part of an overall corporate strategy designed to bolster their competitive position vis-à-vis their domestic rivals such as Toyota.
D) Honda was motivated to circumvent the trade barriers,and Honda's FDI may have been part of an overall corporate strategy designed to bolster their competitive position vis-à-vis their domestic rivals such as Toyota.
F) A) and C)
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A) the end of the greenfield era-we are running out of land.
B) the lack of domestic investment opportunity.
C) the ongoing liberalization of capital markets and the integration of the world economy.
D) none of the options
F) A) and D)
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A) by lower material costs.
B) by lower labor costs.
C) by a desire to preempt the entry of rivals into China's potentially huge market.
D) all of the options
F) A) and C)
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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 options
F) C) and D)
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A) Shareholder diversification
B) The internalization theory of FDI
C) The promise of synergistic gains
D) Vertical integration
F) All of the above
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A) imperfections in product markets.
B) imperfections in capital markets.
C) imperfections in labor markets.
D) all of the options
F) B) and D)
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A) the MNC can form a joint venture with a local company.
B) the MNC may also consider forming a consortium of international companies to undertake the foreign project.
C) the MNC can use local debt to finance the foreign project.
D) the MNC may purchase insurance against the hazard of political risk.
E) all of the options
G) A) and B)
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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 options
F) A) and B)
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A) the firm's cash flows are internationally hedged.
B) shareholders of the firm can indirectly benefit from international diversification even if they are not directly holding foreign shares.
C) shareholders of the firm can directly benefit from international diversification even if they are not directly holding foreign shares.
D) none of the options
F) B) and D)
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A) if the two firms form a horizontally integrated firm.
B) if the two firms form a vertically integrated firm.
C) if the two firms form a linearly integrated firm.
D) none of the options
F) A) and B)
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A) When the government outlaws discrimination against both short and tall people.
B) When two firms join together in a conglomerate merger.
C) When two firms related in the production process are owned by the same firm,as in a plywood manufacturer owning a logging company.
D) all of the options
F) A) and D)
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A) technological,managerial,and marketing know-how.
B) superior R&D capabilities.
C) brand names.
D) all of the options
F) A) and C)
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A) political risk.
B) credit risk,and other economic performances.
C) every risk except political risk.
D) political risk,credit risk,and other economic performances.
F) C) and D)
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A) firms that have intangible assets with a public good property tend to invest directly in foreign countries.
B) property rights in intangible assets are difficult to establish and protect,especially in foreign countries where legal recourse may not be readily available.
C) firms that have intangible assets with a public good property tend to invest directly in foreign countries.Additionally,property rights in intangible assets are difficult to establish and protect,especially in foreign countries where legal recourse may not be readily available.
D) none of the options
F) C) and D)
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A) the unexpected imposition of capital controls,inbound or outbound,and withholding taxes on dividend and interest payments.
B) unexpected changes in environmental policies,sourcing/local content requirements,minimum wage law,and restriction on access to local credit facilities.
C) restrictions imposed on the maximum ownership share by foreigners,mandatory transfer of ownership to local firms over a certain period of time (fade-out requirements) ,and the nationalization of local operations of MNCs.
D) none of the options
F) B) and C)
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A) This move by the government played well with Indian voters with visceral distrust of foreign companies since the British colonial era.
B) This move by the government was widely criticized in India on the grounds that it would deter future foreign investment.
C) This move by the government was widely criticized in India on the grounds that severe power shortages have been one of the bottlenecks hindering India's economic growth.
D) none of the options
F) C) and D)
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A) Shipping costs
B) Firms seek to extend corporate control overseas
C) Imperfect factor markets
D) all of the options
F) A) and C)
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A) when they undertake foreign direct investments (FDI) .
B) with the establishment of new production facilities in foreign countries such as Honda's Ohio plant.
C) when they become involved in mergers with and acquisitions of existing foreign businesses.
D) all of the options
F) A) and C)
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A) moving to the workers.
B) moving to countries where labor services are the lowest in absolute terms.
C) moving to countries where labor services are underpriced relative to productivity.
D) hiring illegal immigrants.
F) A) and C)
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