Ch016ForeignDirectInvestmentandCrossBorderAcquisitions讲课稿Word文档下载推荐.docx

1、Shareholder Diversification ServicesCross-Border Mergers and AcquisitionsPolitical Risk and FDI DaimlerChrysler: The First Global Car Colossus Stories Past and PresentSummaryMINI CASE: Enron versus Bombay Politicians1 Under a 1981 Voluntary Trade Agreement Japanese automobile manufacturers were not

2、allowed to increase their exports to the U.S. market. As a result:a） They exited the marketb） Honda was motivated to circumvent the trade barriers.c） Hondas FDI may have been part of an overall corporate strategy designed to bolster their competitive position vis-vis their domestic rivals such as To

3、yotad） Both b） and c）Answer: d）2 Following Hondas FDI in the U.S.,a） The U.S. government imposed a Voluntary Trade Agreement under which Japanese automobile manufacturers were not allowed to increase their exports to the U.S. market.b） Toyota and Nissan made direct investments in Americac） Sales of

4、Hondas declinedd） none of the above b）3 Hondas decision to build a plan in Ohioa） Was welcomed by the United Auto Workersb） Was encouraged by assistance from the state of Ohio, including improved infrastructure around the plant and abatement of property taxes.c） Involved setting up a special foreign

5、 trade zone that allowed Honda to import auto parts from Japan at a reduced tariff rate.d） All of the above4 When firms undertake FDI,a） They become MNCsb） They reduce their tax rate since they can tell each country that they do business in that they paid their taxes in other countries.c） The can ex

6、ploit workers by paying them below-market wages in depreciating currencies. a）5 FDI can take the form of:a） Greenfield investmentb） Cross-border M&Ac） Establishing new production facilities in a foreign country6 The Ford Motor Company recently acquired Mazda, a Japanese auto maker, and Jaguar, a Bri

7、tish auto maker.a） This is an example of cross-border M&b） This was a Greenfield investmentc） Both a） and b）d） None of the above7 According to a recent UN survey, the world FDI stock grew at what rate relative to worldwide exports of goods and services?a） The world FDI stock grew twice as fast as wo

8、rldwide exports of goods and services.b） The world FDI stock grew at the same rate as worldwide exports of goods and services.c） The world FDI stock grew half as fast as worldwide exports of goods and services.8 Japan plays a major role as an exporter of FDI. As a recipient of FDIa） Japan receives a

9、s much FDI as it exports, making it a major player on both fronts.b） Japan plays a relatively minor role, reflecting a variety of legal, economic, and cultural barriers to FDI.c） Japans receipts of FDI are third in the world9 The third most important host country for FDI isa） The United Statesb） Jap

10、anc） Chinad） Mexico c）10 MNCs have invested in Chinaa） By lower material costs.b） By lower labor costs.c） By a desire to preempt the entry of rivals into Chinas potentially huge market.11 FDI stocksa） Are the common shares of multinational companies that invest abroadb） Are mutual funds that invest

11、in FDI c） Represent the accumulation of previous years FDI flowsd） At the sum total of current year FDI flows12 The dominant source of FDI outflowsa） Several developed countriesb） A few underdeveloped countries next to wealthy neighbors, like Mexicoc） Africa and China13 The key factors that are impo

12、rtant in a firms decision to invest overseas are:a） Trade barriers, imperfect labor market, and intangible assetsb） vertical integration, product life cycle, and shareholder diversification servicesc） profit maximization, global prestige, and competitiond） a） and b）14 Why do firms locate production

13、overseas rather than exporting finished goods?a） Shipping costsb） Firms seek to extend corporate control overseasc） Imperfect factor markets15 While there is no comprehensive theory of FDI, many existing theories emphasize:a） Imperfections in product markets.b） Imperfections in capital marketsc） Imp

14、erfections in labor markets16 International markets for goods and services are often imperfect. Which is the MOST common and MOST important?a） Acts of governments.b） Natural barriers like distancec） Cultural barriers d） Lack of knowledge17 Why do governments regulate international trade?a） To raise

15、revenueb） Protect domestic industries c） Pursue other economic objectives18 Trade barriers can arise naturally. Which of the following represent a natural barrier to trade?a） Transportation costsb） Quotasc） Tariffs d） Transactions costs19 In a push to serve the North American market Samsung, a Korea

16、n firm, chose to locate production facilities in Mexico, mainly becausea） Of lower labor costs in Mexicob） To circumvent trade barriers imposed by NAFTAc） Because of colder weather in CanadaRationale: this is what the book says, but consider partial credit for b）20 Labor services in a country might

17、be underpriced relative to productivity because:a） Workers are not allowed to freely mover across national boundaries to seek higher wages.b） Some countries do a bad job of educating their work force, consequently they are not very productivec） In some countries there is a shortage of capital invest

18、ment.d） All of the above are equally important21 Factors of production include land, labor, capital, and entrepreneurial ability. Of all the factor markets, the MOST IMPERFECT is the a） Labor marketb） Capital marketc） Real estate marketd） Market for entrepreneurial ability22 Severe imperfections in

19、the labor market lead toa） Persistent wage differentials among countriesb） Persistent exchange rate volatility among countriesc） Persistent interest rate differentials among countries23 Severe imperfections in the labor market arise from immobility of workers due to immigration barriers. As a respon

20、se, firms should considera） Moving to the workers.b） Moving to countries where labor services are the lowest in absolute terms.c） Moving to countries where labor services are underpriced relative to productivity.d） Hiring illegal immigrants.24 Coca-Cola has invested in bottling plants all over the w

21、orld rather than licensing local firmsa） Because the foreigners cant be trusted to follow the secret recipe.b） Because Coca-Cola wanted to protect the formula for its famous soft drink.c） Because of the internalization theory of FDI25 The boomerang effecta） The possibility that if the secret formula

22、 of Coca-Cola were leaked, that other firms would come up with similar products and hurt Coca-Colas sales.b） The possibility that FDI in an undeveloped nation will lead to a group of workers who have enough money to afford the firms products, leading to an increase of sales and increase of workers a

23、nd so on.c） The possibility that FDI in an undeveloped nation will lead to a group of domestic workers no longer have enough money to afford the firms products, leading to an decrease of sales.26 In the 1960s, Coca-Cola, which had bottling plants in India, faced strong pressure from the Indian gover

24、nment to reveal the Coke formula as a condition for continued operations in India. As a resulta） Coke agreed to reveal the formula to the Indian government, which has maintained it as a state secret to this day.b） Instead of revealing the formula, Coke withdrew from the Indian market.c） Coke was abl

25、e to successfully lobby the government to withdraw this demand.27 MNCs may undertake overseas investment projects in a foreign country, despite the fact that local firms may enjoy inherent advantages. This implies thata） MNCs are making a mistake in this case and will have to eventually withdrawb） M

26、NCs should have significant advantages over local firms such as comparative advantages due to intangible assetsc） The local firms will not have to compete due to their inherent advantages over the foreigners.28 Examples of intangible assets includea） Technological, managerial, and marketing know-how

27、b） Superior R&D capabilitiesc） Brand names29 Intangible assets are often hard to package and sell to foreigners.a） Because they usually default on the contracts that they signb） As a result, there is more FDI than there might otherwise be.c） Because property rights in intangible assets are difficult to establish and protect, especially in foreign countries where legal recourse may not be readily available.d） b） and c）30 According to the internalization theory of FDIa） Firms that have intangible assets with a public good property tend to invest directly in foreign countries.b） Proper