Deck 9: Foreign Market Entry Strategies

Question 1

Economists usually advocate a free flow of capital across national borders

Answer 1

True

Question 2

A global integration of capital markets spreads best practices in corporate governance, accounting rules, and legal traditions

Answer 2

True

Question 3

FDI (foreign direct investment) flows are more stable than all other forms of capital (portfolio and other investment flows)

Answer 3

True

Question 4

FDI (foreign direct investment) does not benefit developing host countries

Question 5

Developed countries are both the largest recipients and sources of foreign direct investment

Question 6

The triad of the European Union, the United States, and Japan accounts for 60-70 percent of total world inward FDI flows and stocks

Question 7

The countries that are successful in attracting FDI have political and macroeconomic stability and structural reforms

Question 8

Corruption has a positive impact on FDI

Question 9

The exporting strategy works well when a company's home-country currency is strong

Question 10

A service cannot be licensed internationally

Question 11

A licensor should assign a trademark to a licensee rather than specify the conditions under which the mark can be used

Question 12

Joint ventures are dynamic in terms of the mission and the partners' power over time

Question 13

Joint ventures are static in terms of the mission and the partners' power over time

Question 14

According to the "natural" process of joint ventures, over time, the technology-supplying firm buys more or all equity

Question 15

There is no significant relationship between the number of joint-venture partners and the performance of the venture

Question 16

Multinational corporations have shied away from investing in developing economies

Question 17

Multinational corporations' plant location decisions are influenced less by cheap, unskilled labor and more by highly skilled labor at relatively low wages

Question 18

Multinational corporations are more interested in countries that offer highly skilled labor at relatively low wages than in countries that offer cheap, unskilled labor

Question 19

Maquiladora plants focus on assembly activities

Question 20

In general, a host country prefers the establishment of a screwdriver assembly operation

Question 21

Financing is critical for a turnkey project

Question 22

A host government is usually indifferent to whether foreign direct investment is in the form of acquisition

Question 23

Because it takes time to start a greenfield enterprise, a host government generally prefers a foreign firm to acquire an existing local business

Question 24

Host countries prefer that multinational corporations invest in acquisition investments than in greenfield investments for continuity and job retention reasons

Question 25

According to evidence, mergers and acquisitions do not benefit stockholders

Question 26

Cross-border acquisitions have experienced a high failure rate

Question 27

While cultural differences affect international joint venture performance, culture distance stems more from differences in organizational culture than from differences in national cultures

Question 28

A strategic alliance can only be formed when a joint venture takes place

Question 29

All joint ventures are strategic alliances

Question 30

All joint ventures are strategic alliances, but not all strategic alliances are joint ventures

Question 31

Unlike joint ventures which require a new, separate entity, a strategic alliance does not necessarily require a new legal entity

Question 32

A strategic alliance must require partners to make arrangements to share equity

Question 33

For the sake of uniformity and effectiveness, marketers should use the same market entry strategy in all foreign countries

Question 34

Free trade zones can be used to facilitate both exports and imports

Question 35

Free trade zones are used for import purpose but are unsuitable for export

Question 36

Free or foreign trade zones (FTZs) are regulated to allow only import activities while prohibiting using such zones for export activities

Question 37

Free trade zones do not offer any tax advantage other than the postponement of the payment of customs duties

Question 38

An importer using a free trade zone does not have to pay duties while goods are being stored there

Question 39

Free trade zones are basically used for warehousing because such zones cannot be used for manufacturing activities