Deck 4: Global Investment

Question 1

What is FDI and how does it differ from portfolio investment?

Answer 1

No Answer.

Question 2

What are the difference between horizontal, vertical, and complex FDI?

Answer 2

No Answer.

Question 3

What are ownership, locational and internalisation advantages in the OLI model?

Answer 3

No Answer.

Question 4

What is predicted by Dunning's OLI model about the entry mode?

Question 5

What is the role of a firm's productivity level on its entry mode according to the "new new trade theory"?

Question 6

What is the difference between an integrated and a fragmented supply chain?

Question 7

What are the major categories on investment policy measures according to UNCTAD's Investment Policy Monitor?

Question 8

What is "transfer pricing", and what is the role of FDI in facilitating it?

Question 9

Identify the 4 correct statements
1. A cross-border investment is considered as FDI if more than 50% of the capital of a foreign company is acquired.
2. Market-seeking FDI is also labelled as horizontal investment.
3. Internalisation advantages in the OLI model are related to the role that international differences in costs in global production decisions play.
4. The OLI predicts that licencing is the preferred entry mode when there are no internalisation advantages.
5. The "new new trade theory" predicts that the less productive a company is the more likely it will offshore its production.
6. A fully integrated global supply chain may be very complex to manage.
7. "Special Economic Zones" are an instrument to attract FDI.
8. "Transfer pricing" signifies that a company is charging the same prices in domestic and foreign markets