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TRUE/FALSE 1. FPI refers to investment in a portfolio of




TRUE/FALSE;1. FPI refers to investment in a portfolio of foreign securities such as stocks and bonds that do not entail the active management of foreign assets.;2. A type of FDI in which the firm moves upstream or downstream in different value chain stages in a host country is called horizontal FDI.;3. Vertical FDI refers to producing the same products or offering the same services in a host country as firms do at home.;4. FDI stock refers to accumulation of inbound FDI in a country or outbound FDI from a country.;5. If firms from country A undertake $20 billion of FDI in firms from country B in year 1, and another $20 billion in year 2, then we can say that in each of those two years, B receives annual FDI outflows of $20 billion, and A generates annual FDI inflows of $20 billion.;6. The share of FDI-based value added of foreign affiliates of MNEs in world GDP rose from 7% in 1990 to 10% in 2006.;7. The resource-based view argues that recent expansion of FDI is indicative of generally friendlier policies, norms, and values associated with FDI.;8. Internalization refers to the replacement of cross-border markets (such as importing and exporting) with one firm (the MNE) locating in two or more countries.;9. An external market transaction in which firms buy and sell technology is called market imperfections.;10. The benefit of ownership lies in the combination of equity ownership rights and management control rights.;11. Implicit knowledge can be written down and transferred without losing much of its richness.;12. Markets governed by rules, regulation, and norms are designed to reduce costs associated with doing business.;13. International transactions are generally as effective as those governing domestic transactions.;14. FDI may be viewed as a reflection of firm motivation to extend firm-specific capabilities abroad and their responses to overcome imperfections and failures.;15. A political view that is hostile to FDI is called horizontal FDI.;16. Between the 1950s and the early 1980s, the radical view was influential throughout Africa, Asia, Eastern Europe, and Latin America.;17. Most countries practice a totally "free market" view.;18. Brazil, China, Hungary, India, Ireland, and Russia have adopted more FDI-friendly policies.;19. Capital outflow can help improve a host country's balance of payments.;20. FDI creates jobs both directly and indirectly.;21. In the 1960s, Europeans were concerned about the massive US FDI in Europe.;22. One of the benefits of FDI to a host country is repatriated earnings from profits.


Paper#19016 | Written in 18-Jul-2015

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