Question 1

Azure Inc. has established a domestic market in clothing and apparel in Thailand and has received orders from abroad. Currently, the firm is investigating the feasibility of undertaking international business. Azure is in the ________ stage of the internationalization process.

Accepted Answer

Azure Inc. is in the pre-export stage as they are investigating the feasibility of international business after receiving orders from abroad.

Question 2

In which of the following stages of the internationalization process is a firm preoccupied with business in its home market?

Accepted Answer

In the domestic focus stage, a firm is primarily concerned with its operations within its home market, not yet actively pursuing or significantly involved in international markets.

Question 3

In the internationalization process of a firm, the committed involvement stage follows the active involvement stage.

Accepted Answer

In the internationalization process, the committed involvement stage typically follows the active involvement stage, indicating a deeper commitment to international markets.

Question 4

In the ________ stage of the internationalization process, a firm targets numerous foreign markets via various entry modes, especially FDI.

Accepted Answer

In the committed involvement stage of the internationalization process, a firm significantly engages in international activities, targeting multiple foreign markets and often using various entry modes, including Foreign Direct Investment (FDI), to establish a strong presence abroad.

Question 5

According to the internationalization process model, internationalization takes place in incremental stages over a short time.

Accepted Answer

The internationalization process model, also known as the Uppsala model, suggests that firms internationalize gradually over a longer period, increasing their international commitment and activities in incremental steps based on their experiential learning and market knowledge.

Question 6

According to the internationalization process model, a firm starts out in a pre-export phase and is preoccupied with business in its home market.

Accepted Answer

The answer of According to the internationalization process model, a...

Question 7

Born global firms are young companies that internationalize early in their evolution.

Accepted Answer

Born global firms are indeed young companies that begin their international operations shortly after their establishment, bypassing traditional gradual stages of internationalization.

Question 8

________ theory suggests that firms using FDI as an internationalization strategy must own or control certain resources and capabilities not easily available to competitors.

Accepted Answer

Monopolistic advantage theory posits that firms engage in foreign direct investment (FDI) because they possess certain unique advantages not shared by competitors in foreign markets. These advantages can include technology, brand names, or production processes, allowing the firm to overcome the costs of operating in a foreign environment.

Question 9

In a short essay, explain why the comparative advantage principle is the foundation and overriding justification for international trade. How does this principle support the competitive advantage of nations theory?

Accepted Answer

The answer of In a short essay, explain why the...

Question 10

Which of the following explains how firms can use FDI to gain and sustain competitive advantage?

Accepted Answer

Monopolistic advantage theory suggests that firms can gain and sustain competitive advantage through FDI by leveraging unique assets or capabilities that are not available to local firms in the host country.

Question 11

Born globals have emerged in large numbers for two main reasons: globalization and advances in communication and transportation technologies.

Accepted Answer

Born globals are companies that, from or near their inception, seek to derive significant competitive advantage from the use of resources and the sale of outputs in multiple countries. The emergence of born globals in large numbers is indeed attributed to globalization, which has made the world's markets more interconnected, and to advances in communication and transportation technologies, which have significantly reduced the barriers to international trade and investment. These advancements have made it easier for even small firms to operate globally from the outset.

Question 12

According to the internationalization process model, a firm advances to the ________ stage by initiating limited international activity, typically in the form of basic exporting.

Accepted Answer

The internationalization process model suggests that firms move through stages of increasing international involvement. In the "experimental involvement" stage, a firm begins its international activities, often starting with basic exporting, to test and learn from foreign markets before committing more resources.

Question 13

International entrepreneurship is a new field of scholarly inquiry that is a result of the ________ phenomenon.

Accepted Answer

International entrepreneurship has emerged as a field of study due to the phenomenon of 'born global' firms, which are businesses that, from or near their inception, seek to derive significant competitive advantage from the use of resources and the sale of outputs in multiple countries.

Question 14

Current trends suggest that early internationalizing firms will ________.

Accepted Answer

Current trends indicate that early internationalizing firms are becoming more prevalent in international business, as advancements in technology, communication, and transportation make it easier for even small and new companies to engage in international trade and operations.

Question 15

A ________ is one or more resources or capabilities a company possesses that few other firms have.

Accepted Answer

A monopolistic advantage is a unique advantage a company holds over other competitors in the form of exclusive resources, capabilities, or technologies, which are not easily replicated. This allows the company to maintain a monopoly or dominant position in the market.

Question 16

Which of the following explains the expansion of born global firms despite the scarcity of financial, human, and tangible resources?

Accepted Answer

Globalization has facilitated international business operations, making it easier for born global firms to expand despite limited resources. Advances in technology, communication, and transportation have lowered barriers to entry and operation in foreign markets.

Question 17

According to the internationalization process model, a firm is likely to receive unsolicited product orders from abroad before advancing to the pre-export stage.

Accepted Answer

According to the internationalization process model, firms often start their international activities with unsolicited orders from abroad, which can precede more deliberate efforts to explore foreign markets, such as entering the pre-export stage where firms actively seek out information and resources to begin exporting.

Question 18

________ describes the total value of assets that MNEs own abroad via their investment activities.

Accepted Answer

FDI stock represents the total value of foreign direct investments that multinational enterprises (MNEs) have made in other countries, reflecting the assets they own abroad.

Question 19

Born global firms are ________.

Accepted Answer

The answer of Born global firms are ________.
...

Question 20

Explain the limitations of early trade theories. Discuss born global firms.

Accepted Answer

The answer of Explain the limitations of early trade theories....

Quiz 5: Theories of International Trade and Investment