Which of the following statements is true of the impact of terrorism within a country on multinational companies in the macro sense?
Which of the following statements is true of the impact of terrorism within a country on multinational companies in the macro sense? It is extremely difficult to guarantee that companies can fully avoid harm from terrorism, but political risk analysis and preparation may forestall it.
When host governments do not need alliances?
When host governments do not require alliances as a condition for entry, many multinational companies: find that having an alliance is advantageous to their entry and expansion. are advised not to voluntarily pursue alliances, as they tend to be problematic.
Which of the following means of adaptation to political risk requires?
The four means of political risk adaptation are: (1) equity sharing-shared ownership or partial ownership with nationals; (2) participative management-actively involving nationals in the management of the firm; (3) localization of operations-modifications to the company’s management style, company name, etc., to …
Which of the following is a salient feature of horizontal investments?
Examples of ownership-control risks include tariffs on exports and imports, as well as restrictions on exports. Which of the following is a salient feature of horizontal investments? They involve the production of goods or services that are the same as those produced at home.
What is universal political risk?
Political risk is the risk an investment’s returns could suffer as a result of political changes or instability in a country. Instability affecting investment returns could stem from a change in government, legislative bodies, other foreign policymakers or military control.
What is macro political risk?
Macro risk is a type of political risk that impacts all asset classes exposed to a particular country or region. Macro risk can be political in nature or caused by macroeconomic factors outside of government control.
Which of the following is likely to happen to the bottom line performance of subsidiaries if a country devalues its currency?
Which of the following is likely to happen to the bottom-line performance of subsidiaries if a country devalues its currency? There will be an increase in export sales of subsidiaries.
What are the conditions under which relations between governments and MNCs are generally positive?
Relations between governments and MNCs are generally positive if the investment: 1) improves the balance of payments by increasing exports or reducing imports through import institution; 2) uses locally produced resources; 3) transfers capital, technology, and/or skills, 4) creates jobs, 5) makes tax contributions.
Is based on a comprehensive set of laws organized into a code?
70) Common law is based on a comprehensive set of laws organized into a code.
What are micro political risk events?
Micro risk is a type of political risk that refers to actions in a host country that can adversely affect selected foreign operations of a company that does business internationally. Micro risk can come about from events that may or may not be in the reigning government’s control.
When a firm exports its products to a foreign country foreign direct investment occurs?
When a firm exports its products to a foreign country, foreign direct investment occurs. Greenfield investment involves the establishment of a new operation in a foreign country. The flow of foreign direct investment refers to the number of countries a firm is investing in at any given point in time.
What is vertical foreign direct investment?
Vertical foreign direct investment occurs when a multinational acquires an operation that either acts as a supplier or distributor. Horizontal FDI occurs when a company initiates a similar operation or business model in another country.