Question 1

Explain the relationship among the terms nationalization, expropriation, and confiscation.

Accepted Answer

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Question 2

________ is the risk associated with the potential for the employees or operations of the firm to be threatened by changes in laws, environmental standards, tax codes, and terrorism.

Accepted Answer

Operating risk is associated with the potential for a firm's operations or employees to be affected by changes in laws, environmental standards, tax codes, and terrorism. These factors can disrupt operations and impact the firm's performance.

Question 3

Which country has the highest rate of software piracy?

Accepted Answer

China has historically been reported to have one of the highest rates of software piracy due to its large population and challenges in enforcing intellectual property laws.

Question 4

What is the purpose of the Helms-Burton Act? Why do you think this law is controversial?

Accepted Answer

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Question 5

What is forum shopping? Why do you think forum shopping puts American companies at a disadvantage?

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Question 6

The transmittal of technology from one country to another is known as technology ________.

Accepted Answer

Technology transfer is the process of sharing or disseminating technology among countries, organizations, or institutions.

Question 7

What is the purpose of the principle of comity? What conditions are required under the principle of comity?

Accepted Answer

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Question 8

When a dispute occurs in international commerce, what questions typically need to be answered to resolve the problem? Why do some firms often avoid litigation? What alternatives to litigation are available?

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Question 9

What problems in international markets can be created by counterfeiting and intellectual property theft?

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Question 10

________ is the risk associated with the potential for the government to interfere with the firm's ability to move funds in and out of the country.

Accepted Answer

Transfer risk is specifically related to the potential for government interference in a firm's ability to move funds across borders. This can include restrictions on currency conversion, repatriation of profits, or capital controls imposed by the government.

Question 11

________ is a systematic analysis of the political risks possible in foreign countries.

Accepted Answer

Political risk assessment specifically focuses on analyzing the potential political risks that a business might face when operating in or considering entering foreign markets. This includes evaluating the stability of the political environment, government policies, and any other political factors that could affect business operations.

Question 12

What are the similarities and differences between the four systems of law that serve as the basis for the world's legal systems? How do domestic laws affect international businesses?

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Question 13

Why is arbitration preferred as a means of resolving disputes?

Accepted Answer

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Question 14

Which results in a loss of assets?

Accepted Answer

The answer of Which results in a loss of assets?
...

Question 15

Why does privatization typically occur? What types of industries are candidates for privatization?

Accepted Answer

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Question 16

Wilfred Enterprises has foreign operations in Taiwan, India, and China. The firm pays an annual insurance premium to the Overseas Private Investment Corporation. The firm is most likely protecting itself from ________.

Accepted Answer

The Overseas Private Investment Corporation (OPIC) provides political risk insurance to U.S. companies investing abroad, protecting them against risks such as expropriation, nationalization, and political violence, not privatization, natural disasters, or financial instability.

Question 17

What questions regarding political risk and the technological environment should a firm consider before entering a new market?

Accepted Answer

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Question 18

________ is the risk associated with the potential for the firm's property to be confiscated or expropriated.

Accepted Answer

Ownership risk is specifically associated with the potential for a firm's property to be confiscated or expropriated by the government or other entities, affecting the firm's ability to maintain control over its assets.

Question 19

Which of the following would most likely help a country change its technological environment?

Accepted Answer

Foreign direct investment can bring new technologies and innovations into a country, helping to change and improve its technological environment.

Question 20

Pimlico Steel operates an aluminum refining plant in Jamaica. The contract between Pimlico and Jamaica requires the corporation to train Jamaican engineers in the latest processes. Jamaica has most likely required Pimlico to agree to a(n) ________.

Accepted Answer

The requirement for Pimlico Steel to train Jamaican engineers in the latest processes is an example of a technology transfer. This involves the dissemination of technological information, expertise, or manufacturing processes from one organization or country to another, often as part of a contractual agreement.

Quiz 3: Legal, Technological, and Political Environments