Deck 6: The Global Production Structure

Question 1

What benefits do economic liberals think result from the shift of a greater proportion of global manufacturing from developed to developing countries?

Answer 1

No Answer.

Question 2

What are mercantilists' main worries about the changing global production structure?

Answer 2

No Answer.

Question 3

Why do TNCs engage in foreign direct investment (FDI)? Assess several factors that contribute to the decision by TNCs to establish operations abroad.

Answer 3

No Answer.

Question 4

Explain what is right and what is wrong with the following statement: "Most TNCs invest in less developed countries because of the low wages that they can pay there."

Question 5

How would an international agreement on governance of foreign direct investment benefit TNCs? How would such an agreement benefit states? What prevents such an agreement from being realized?

Question 6

Explain the different perspectives of liberals, mercantilists and structuralists on TNCs.

Question 7

What kinds of assistance do states give to TNCs? Do you agree with the claim that states are losing control over TNCs? Why or why not?

Question 8

Why haven't states done more to crack down on corporate tax avoidance? Why is it hard for governments to reduce tax avoidance and tax evasion by TNCs?

Question 9

Explain some of the methods that TNCs use to reduce their taxes.

Question 10

Are TNCs held accountable enough for their misdeeds? Should they be subject to much more stringent regulations? If so, through what political, economic, or social institutions or mechanisms? Why might voluntary corporate social responsibility codes be insufficient instruments to attain important social goals?

Question 11

How are automation and the globalization of production affecting workers in developed and developing countries?

Question 12

What kinds of rules and regulations would you like to see states agree to apply to GVCs, SWFs, and TNCs? Why?

Question 13

Which of the following is most accurate?

A) TNCs are not subject to nation-state regulation.
B) TNCs' investments in developing countries have decreased since 2000.
C) China in the largest recipient of FDI.
D) Structuralism is the IPE perspective that sees TNCs as agents of capitalist imperialism.

Question 14

Which of the following is not one of the fifteen largest nonfinancial TNCs (based on foreign assets owned?

A) General Electric
B) Boeing
C) Toyota
D) BP

Question 15

As of early 2017, which four TNCs had the largest market capitalization, i.e., the highest total value of outstanding stock?

A) Apple, Alphabet, Microsoft, Amazon
B) Royal Dutch Shell, BP, ExxonMobil, Chevron
C) Toyota, Volkswagen, Daimler, Honda
D) General Electric, AT&T, Samsung

Question 16

Which of the following statements is incorrect?

A) In 2016 developed countries were hosts to 59 percent of all inward FDI.
B) The United States receives more inflows of FDI than all or South and Central America combined.
C) Sub-Saharan Africa received 10 percent of FDI in 2016.
D) The majority of large TNCs have their headquarters in developed countries.

Question 17

Since 1990, which of the following countries or regions has usually had the highest annual net inflows of FDI?

A) The United States
B) China
C) South and Central America
D) The European Union

Question 18

The United States and China have the world's two largest economies, as measured by the size of their GDP. Which country has the 3rd largest economy?

A) India
B) Germany
C) United Kingdom
D) Japan

Question 19

What does a mercantilist think will be a consequence for the United States of outsourcing and offshoring?

A) It will raise the price of imported consumer goods.
B) It will strengthen U.S. labor unions.
C) It will weaken U.S. national security.
D) It will reduce the profits of U.S.-headquartered transnational corporations.

Question 20

Outsourcing by TNCs can result in:

A) increased employee insecurity among workers in the home countries of the TNCs.
B) increased sales of the TNCs' products in the countries where it outsources or has offset agreements.
C) increased competition from firms that have received outsourced work.
D) all of the above.

Question 21

Which of the following is a likely reason why TNCs invest in production overseas?

A) to overcome trade barriers
B) to be closer to foreign customers
C) to manage the risk of foreign exchange rate fluctuations
D) to get direct access to natural resources
E) all of the above

Question 22

The process in which a TNC contracts with other companies overseas to provide it goods and services is called

A) outsourcing.
B) insourcing.
C) offshoring.
D) scaling.

Question 23

Which statement accurately characterizes Global Value Chains?

A) They are governed by the Multilateral Agreement on Investment.
B) They encompass all the tasks that companies and workers perform to bring a product from conception to final use.
C) Firms in the GVCs seek to move from design and marketing activities to labor-intensive manufacturing.
D) All of the above.

Question 24

Given the expanding importance of TNCs in global markets, the role of the state seems to

A) have changed, where the state's role now is to bargain with TNCs.
B) have diminished drastically; TNCs now call all the shots.
C) have become stronger because neoliberal policies are more important now than ever before.
D) have stayed the same; the state's role has always been to encourage its businesses.

Question 25

Which of these statements is incorrect?

A) U.S corporations are exempt from taxes on profits they repatriate back to the United States from overseas.
B) TNCs can lower their taxes by shifting control of their intellectual property to a shell company in a tax haven.
C) Transfer pricing is a means for TNCs to lower their global tax bill.
D) The OECD has for years tried to tackle base erosion and profit shifting (BEPS).

Question 26

Which of these corporate scandals involved manipulation of a benchmark rate in financial markets?

A) The LuxLeaks scandal
B) The NY-LON scandal
C) The LIBOR scandal
D) The VW scandal

Question 27

In developed countries, the globalization of production is connected with

A) the growth of the precariat.
B) stagnation of wages.
C) declining union membership.
D) none of the above.
E) all of the above.

Question 28

Which of the following statements about sovereign wealth funds (SWFs) is correct?

A) SWFs manage pools of money on behalf of governments.
B) SWFs are managed by private investment banks, especially those based in New York and London.
C) SWFs cannot be used to advance a country's foreign policy interests.
D) SWFs are usually accountable to regulators and voters.