17.1-10 – Example of internalization advantage of MNE
Multinational Business Finance
Eiteman, Stonehill, and Moffett
15th Edition
A/An ____ is an example of an internalization advantage for a multinational enterprise, MNE.
Finance,international Business
17.1-7 The L in OLI
Multinational Business Finance
Eiteman, Stonehill, and Moffett
15th Edition
What does the L in OLI refer to when talking about the firm’s home market?
17.2-11 – Sequential search pattern
Multinational Business Finance
Eiteman, Stonehill, and Moffett
15th Edition
T/F: When firms expand into other countries, they have been observed to follow a sequential search pattern as described in the behavioral theory of the firm.
17.4-3 – What is the risk that the host government will take specific steps?
Multinational Business Finance
Eiteman, Stonehill, and Moffett
15th Edition
What is the risk that the host government will take specific steps that prevent the foreign affiliate from having control over the firm’s assets?
17.5-8 – T/F: A country can react to potential blocked funds
Multinational Business Finance
Eiteman, Stonehill, and Moffett
15th Edition
T/F: A country can react to the potential for blocked funds prior to making an investment by investing in the local country’s assets that maintain their value.
Concept – Country-Specific Risks in International Business
Multinational Business Finance
Eiteman, Stonehill, and Moffett
16th Edition
Which of the following is NOT identified as a primary country-specific risk by the authors?
A. Thin equity base
B. Cultural differences
C. Protectionism
D. Transfer risk
Concept – Disadvantages of Licensing vs. FDI
Multinational Business Finance
Eiteman, Stonehill, and Moffett
16th Edition
Which option does NOT represent a potential drawback of licensing when compared to Foreign Direct Investment (FDI)?
A. possible loss of quality control
B. establishment of a potential competitor in third-country markets
C. possible improvement of the technology by the local licensee, which then enters the original firm’s home market
D. All of the above are potential disadvantages to licensing.
Concept – Fronting Loan Features in International Subsidiaries
Multinational Business Finance
Eiteman, Stonehill, and Moffett
16th Edition
Which option does NOT describe a common attribute of a fronting loan provided to an international subsidiary?
A. The lending bank is located in the subsidiary’s country.
B. The bank lends to the subsidiary firm an amount equal to the parent deposit at a slightly higher interest rate.
C. The parent makes a deposit equal to the size of the desired loan into a large commercial bank.
D. All of the above are typical characteristics of a fronting loan.
Concept – Owner-Specific Advantages in OLI Framework
Multinational Business Finance
Eiteman, Stonehill, and Moffett
16th Edition
What are the essential attributes of owner-specific advantages in the OLI (Ownership, Location, Internalization) framework?
- A. not easily copied.
- B. firm-specific.
- C. transferable to foreign subsidiaries.
- D. all of the above
Concept – Proactive Measures for Blocked Funds Risk
Multinational Business Finance
Eiteman, Stonehill, and Moffett
16th Edition
Is it true that a country can respond to the possibility of blocked funds by taking action before investing, during operations, or by investing in local assets that retain their value?
A. True
B. False