Which of the following are common characteristics of multinational enterprises?
1. Company headquarters are distant from the country where the production occurs
2. Research and development in the host country.
3. Foster the transfer of technology.
Goods are exchanged at competitive prices: conventional trade model.
Factor inputs moves freely among nations: multinational enterprise analysis.
Resources are transferred from lower to higher production uses: multinational enterprise
Types of multinational integration
Softdrink owns companies that bottle its products in Russia, Poland and Germany: Horizontal
An automaker establishes foreign dealerships: forward
A steel production owns the extraction of raw materials: forward
A cigarette manufacturer acquires a toy company: conglomerate
Foreign direct investment (FDI)
Which of the following statements about foreign direct investment are correct?
1. FDI allows the parent firm to avoid tariffs on the products it sells in the host country.
2. U.S FDI includes purchases of government bonds by U.S investors.
Choice between direct exporting and FDI
Based on the das spielzueg’s average cost curve, within the factory it can produce 10,000
puzzles at $300 per toy, produce 20,000 puzzles at $600 per toy and produce the total of
30,000 puzzles at $900 per toy.
production cost: Germany Russia
Produce 20,000 toys in Germany and 10,000 toys in Russia
Produce 30,000 toys at the same factory
If Das spielzueg produced 30,00 puzzles in Germany and transports 10,000 to Russia, its total
cost of production and shipping cost is $ 1800
If das spielzueg produces 30,000 puzzles in Russia and transports 20,000 to Germany, its total
cost of production and shipping cost is $ 2700
Based on das spielzueg’s production and shipping cost determined previously, which of the