A strongly competitive home market can sharpen a firm’s competitive advantage relative to firms located in less competitive markets. Explain what is meant by the “competitive advantage of nations.”
Answer to relevant QuestionsThe OLI Paradigm is an attempt to create an overall framework to explain why MNEs choose FDI, rather than serve foreign markets through alternative modes. Explain what is meant by the O, the L, and the I of the paradigm. How is expropriation risk factored into the capital budgeting analysis of a foreign project? A foreign subsidiary does not have an independent cost of capital. Assume a firm purchases inventory with one foreign currency and sells it for another foreign currency, neither currency being the home currency of the parent or subsidiary where the manufacturing process takes place. What ...Electro-Beam Company generates and disburses cash in the currencies of four countries, Singapore, Malaysia, Thailand, and Vietnam. What would be the characteristics you might consider if charged with designing a centralized ...
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