Chapter 16, Problem 2BIC

Which one of the following is likely discouraging foreign direct investmen (FDI) in one country?  A. The foreign firm would produce a good which is currently not available in the host country. B. The foreign firm intends to partner with the local firms of the host country. C. The foreign firm's products are similar with the local firms of the host country. D. The foreign firm is able to compete in the market of the host country.  Clear my choice

A manufacturing company plans to expand their production and logistics facility into one of the countries listed in the following table. The cost of building such facilities in each country differ based on the state of its economic and political climate.  What is the best decision alternative using MINIMAX REGRET decision criterion?  What is the best decision alternative using criterion of realism at alpha = 0.8?

Which of the following is not a reason for U.S. firms operating in foreign markets? A.Better economic and political environment (in the U.S.) B.Less expensive labor C.Tax incentives D. To achieve international diversification

As the executive of a manufacturing firm that receives supplies from 18 different countries and sells products to 24 countries, your success and failure is determined by exchange rates, which cause frequent fluctuations in the price of supplies and the sale price of manufactured goods. Considering both the pros and cons of currency hedging and strategic hedging, which strategy would you opt for? How would you justify this decision to other executives and to shareholders?

Why is exporting such a popular global strategy among small businesses? Do you think this should be the case?

The complexity posed by differences in the cultural, political, legal, and economic environments creates a so-called “liability of foreignness.” This idea holds that foreign companies, because of their poorer familiarity with local conditions, incur additional costs. In theory, the liability of foreignness makes IB activity too expensive. In practice, companies offset this liability by capitalizing on their unique advantages as well as selecting the mode of international business that best reflects their resource profile and risk tolerance--Always in the effort toward minimizing the intrinsic higher costs of international operations. The higher costs of international operations, executives point out, are driven by things as varied as the cost of legally establishing businesses, real estate costs, customs duties, and translation costs. Managing these costs is complicated by the report that    _53_______%___ of global CEOs are concerned about the impact of    __bribery and…

Which of the following is NOT a reason why companies move into international operations?   a. To better serve their primary customers.     b. To take advantage of lower production costs in regions where labor costs are relatively low.     c. To increase their inventory levels.     d. Because important raw materials are located abroad.     e. To develop new markets for the firm's products.

If a new competitor enters the Chinese market in the near future that could bring pressure, how would that affect future investment?

When the dollar is worth more in relation to currencies of other countries, are you more likely to buy American made or foreign made jeans? Are US companies that manufacture jeans happier when the dollar is strong or when it is weak?  What about an American company that is in the business of importing jeans to the US?