RSM Internationalization 5

Question 1

The 'country-of-origin effect' in international marketing refers to:

Accepted Answer

Consumer perceptions of product quality biased by the product's home country

Answer

Country-of-origin effect means consumers associate product quality and desirability with the national image of the producing country (e.g., 'Made in Germany' signals engineering quality).

Question 2

When a firm enters a foreign market through a joint venture, the most common reason for subsequent failure is:

Accepted Answer

Conflict over strategic direction, control, and profit distribution between partners

Answer

Partner conflicts arising from divergent goals, unequal contributions, or power struggles are empirically the leading cause of international joint venture instability and dissolution.

Question 3

Under the TRIPS Agreement (WTO), member countries must provide minimum standards for:

Accepted Answer

Intellectual property rights protection including patents, copyrights, and trademarks

Answer

TRIPS (Trade-Related Aspects of Intellectual Property Rights) obligates WTO members to enforce minimum IP protections, a critical factor for technology-intensive MNEs.

Question 4

In international business, 'transfer pricing' refers to:

Accepted Answer

Prices set for transactions between units of the same MNE across borders

Answer

Transfer prices are internal prices MNEs set for intra-firm cross-border transactions; they are closely scrutinized by tax authorities for profit-shifting concerns.

Question 5

Which concept explains why firms from the same home country tend to cluster in the same foreign markets, following each other's FDI decisions?

Accepted Answer

Herding behavior / follow-the-leader FDI

Answer

Follow-the-leader or oligopolistic reaction theory (Knickerbocker) suggests MNEs mimic rivals' FDI to maintain competitive parity and avoid disadvantage.

(RSM) Rotterdam School of Management Practice Test

(RSM) Rotterdam School of Management Practice Test

RSM Internationalization 5