C211 Study Guide Questions

C211 STUDY GUIDE QUESTIONS

WhatoiisoiForeignoiDirectoiInvestment?oi-oians--
isoidirectoiinvestmentoiin,oicontrol,oiandoimanagementoiofoivalue-
addedoiactivitiesoiinoiotheroicountries.

WhatoidifferentoipoliticaloiviewsoiexistoionoiFDI?oi-oians--
Radical,oiFreeoiMarket,oiandoiPragramaticoiNationalism

WhatoibenefitsoiexistoitooiaoicountryoireceivingoiFDI?oi-oians--
Capitaloiinflow,oiTechnology,oimanagement,oijoboicreation

WhatoicostsoiexistoitooiaoicountryoireceivingoiFDI?oi-oians--
Lossoiofoisovereignty,oiadverseoieffectsoionoicompetition,oiandoicapitaloioutflow

Howoidooiresourcesoiandoicapabilitiesoiinfluenceoitheoicompetitiveoidynamicsoiofoiaoibusine
ss?oi-oians--Value,oirarity,oiimitibility,oiandoiorganizationoi(VRIO)

Globalizationoinewoiviewoi-oians--
Aoinewoiforceoisweepingoithroughoitheoiworldoiinoirecentoitimes

Evolutionaryoiglobalizationoiviewoi-oians--long-
runoihistoricaloievolutionoisinceoitheoidawnoiofoihumanoihistory

"Pendulum"oiviewoionoiglobalizationoi-oians--
Oneoithatoiswingsoifromoioneoiextremeoitooianotheroifromoitimeoitooitime

Whatoiisoiresourceoisimilarityoiandoihowoidoesoithisoiimpactoicompetitiveoidynamics?oi-
oians--
Theoidegreeoitooiwhichoitwooifirmsoiwithoisimilaroiresourcesoiareoilikelyoitooihaveoicompetitiv
eoiactions.oiie:oimarketoicommonality

Giveoiaoidescriptionoiofoitheoiclassicaloitheoryoiofoiinternationaloitrade.oi-oians--
Theoimajoroitheoriesoitypicallyoistudiedoiconsistoiofoimercantilism,oiabsoluteoiadvantage,oia
ndoicomparativeoiadvantage

Howoiwouldoitheoimodernoitheoryoicompareoitooitheoiclassicaloitheory?oi-oians--
theoimajoroitheoriesoitypicallyoistudiedoiconsistoiofoiproductoilifeoicycle,oistrategicoitrade,oia
ndoinationaloicompetitiveoiadvantage.

, Absoluteoiadvantageoi-oians--
involvesoibeingoimoreoiefficientoithanoianyoneoielseoiinoitheoiproductionoiofoianyoigoodoioroi
service

comparativeoiadvantageoi-oians--
isoitheoirelativeoi(notoiabsolute)oiadvantageoiinoioneoiabsoluteoiactivityoithatoioneoinationoie
njoysoiinoicomparisonoiwithoiotheroinations

Mercantilismoi-oians--
Classicaloitradeoitheoryoithatoiviewedoiinternationaloitradeoiasoiaoizero-sumoigame

Whatoiareoitheoicriticaloifeaturesoiofoitheoiproductoilifeoicycle?oi-oians--
Anoieconomicoitheoryoithatoiaccountsoiforoichangesoiinoitheoipatternsoiofoitradeoioveroitime

Howoiwouldoiyouoidescribeoistrategicoitrade?oi-oians--
Aoitheoryoithatoisuggestsoithatoistrategicoiinterventionoibyoigovernmentsoiinoicertainoiindust
riesoicanoienhanceoitheiroioddsoiforoiinternationaloisuccess

Howoiareoisupplyoiandoidemandoirelatedoitooitheoiexchangeoirateoiofoiaoicountry?oi-oians--
Exchangeoiratesoiriseoiandoifalloibasedoionoitheoiunderlyingoieconomicoiconditionsoithatoipr
omptoitraders,oiinvestorsoiandoiothersoitooiwantoimoreoiofoiaoiparticularoicurrency.

Whichoitheoryoicameoifirst,oimercantilismoioroimodern-dayoiprotectionism?oi-oians--
Mercantilism:oiAsoiprotectionismoiisoitheoiideaoithatoigovernmentsoishouldoiprotectoidomest
icoiindustriesoifromoiimportsoi&oivigorouslyoipromoteoiexports

Ifoiaoicompanyoiseeksoitooilimitoiforeignoiexchangeoirateoiexposureoiinoitheoiforwardoidirecti
on,oiwhatoiisoitheoimostoieffectiveoiwayoitooidooithis?oi-oians--
Thisoicanoibeoiaccomplishedoibyoihedging

Explainoitheoiconceptoiofoi"hedging"oiasoiitoirelatesoitooireducingoivariousoitypesoiofoirisk.oi-
oians--StrategiesoioroiToolsoiusedoi=Hedging
Riskoiassociatedoiwithoi=Transactionoirisks
Theyoiuseoihedgingoitooiminimizeoitransactionoirisks

Whatoiisoitransactionoirisk?oi-oians--
TheoiRiskoithatoiaoicompanyoiwilloiincuroilossesoidueoitooianoiadverseoichangeoiinoitheoirelev
antoiforeignoiexchangeoirate

Strategicoihedgingoi-oians--
spreadingoioutoiactivesoiinoiaoinumberoiofoidifferentoicurrencyoizonesoitooioffsetoianyoicurre
ncyoilossesoiinoioneoiregionoithroughoigainsoiinoianotheroiregion.

currencyoihedgingoi-oians--
Aoitransactionoithatoiprotectsoitradersoiandoiinvestorsoifromoiexposureoitooitheoifluctuations
oiofoitheoispotoirate.