RSM Internationalization 2

Question 1

According to Dunning's OLI paradigm, which advantage explains why a firm chooses to produce abroad rather than export?

Accepted Answer

Location advantage

Answer

Ownership advantage

Answer

Internalization advantage

Answer

Institutional advantage

Question 2

The concept of 'liability of foreignness' refers to:

Accepted Answer

Additional costs firms face when operating in unfamiliar foreign markets

Answer

Tariffs imposed on imported goods

Answer

Legal penalties for violating host-country regulations

Answer

Currency risk from operating in multiple countries

Question 3

Which entry mode gives a firm the MOST control over its foreign operations but requires the HIGHEST resource commitment?

Accepted Answer

Wholly owned subsidiary

Answer

Licensing

Answer

Franchising

Answer

Joint venture

Question 4

In Hofstede's cultural dimensions, a country scoring HIGH on 'uncertainty avoidance' tends to:

Accepted Answer

Prefer structured rules, formality, and predictability

Answer

Embrace ambiguity and take risks readily

Answer

Favor individual achievement over group harmony

Answer

Accept large power differences between social levels

Question 5

Transaction Cost Theory applied to internationalization suggests firms internalize activities abroad when:

Accepted Answer

Market imperfections make external transactions costly or risky

Answer

Market transactions are cheaper than internal coordination

Answer

The host country has favorable tax rates

Answer

The Uppsala model predicts low psychic distance

Question 6

Which theory argues that firms from small, open economies internationalize early to overcome limited domestic market size?

Accepted Answer

Born global / international new ventures theory

Answer

Uppsala model

Answer

Diamond model

Answer

Imitation lag theory

Question 7

Porter's Diamond model identifies four determinants of national competitive advantage. Which is NOT one of them?

Accepted Answer

Cultural distance

Answer

Factor conditions

Answer

Demand conditions

Answer

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