Question : 31.The greater the pressures for cost reductions are, the more : 1299435

31.The greater the pressures for cost reductions are, the more likely an international firm will want to pursue some combination of exporting and wholly owned subsidiaries. 

32.One of the advantages of acquisitions is that they are quick to execute. 

33.When an international firm makes an acquisition in a foreign market, it acquires valuable intangible as well as tangible assets. 

34.According to David Ravenscraft and Mike Scherer’s study, many acquisitions destroy rather than create value. 

35.An advantage of establishing a greenfield venture in a foreign country is that it gives the firm a much greater ability to build the kind of subsidiary company that it wants. 

Multiple Choice Questions

36.Which of the following is true of foreign expansion?  

A. The timing and scale of entry for foreign expansion are minor details in comparison with the choice of foreign market.

B. The long-run economic benefits of doing business in a country are a function of the country’s population size.

C. All the nations in the world do not all hold the same profit potential for a firm contemplating foreign expansion.

D. The costs and risks associated with foreign expansion are higher in economically advanced nations.

E. Other things being equal, the benefit–cost–risk trade-off is likely to be most favorable in politically unstable nations.

37.Which of the following is the first basic entry decision that a firm contemplating foreign expansion must make?  

A. When to enter a foreign market

B. On what scale to enter a foreign market

C. Which foreign markets to enter

D. Whether to enter a market before other firms and claim first-mover advantages

E. Whether to enter into licensing agreements or use the franchising model

38.Which of the following is true of the factors regarding the selection of a foreign market?  

A. All nation states in the world hold the same profit potential for a firm contemplating foreign expansion.

B. The long-run economic benefits of foreign expansion are a function of factors such as the likely future wealth of consumers.

C. Less populous nations have a higher potential for economic growth.

D. Politically unstable nations by virtue of their higher potential for growth are the best foreign markets.

E. The attractiveness of a country as a potential market for an international business depends only on its geographical location.

39.Which of the following is a reason why a relatively poor country may be an attractive target for inward investment?  

A. Rapid economic growth

B. Political instability

C. Currency depreciation

D. High cost of living

E. Less developed infrastructure

40.Which of the following is true of the basic entry decisions a firm must make before a firm contemplates foreign expansion?  

A. The long-run economic benefits of doing business in a country are solely a function of the number of consumers in the market.

B. The attractiveness of a country as a potential market for an international business depends on balancing the benefits, costs, and risks associated with doing business in that country.

C. The costs and risks associated with doing business in a foreign country are typically higher in economically advanced and politically stable democratic nations.

D. The benefit–cost–risk trade-off is likely to be most favorable in politically unstable countries.

E. All the nation-states in the world hold the same profit potential for a firm contemplating foreign expansion.