Chapter 11 - Multinational Corporations Questions with correct Answers
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Course
MNC
Institution
MNC
Chapter 11 - Multinational Corporations Questions with correct Answers
multinational corporation
an entity headquartered in one country that does business in one or more foreign countries
liberalization
the economic policy of lowering tariffs and other barriers to encourage trade and inve...
Chapter 11 - Multinational Corporations
Questions with correct Answers
multinational corporation - answer an entity headquartered in one country that does
business in one or more foreign countries
liberalization - answer the economic policy of lowering tariffs and other barriers to
encourage trade and investment
transnational corporation - answer as defined by the United Nations, a parent firm
that controls the assets of affiliated entities in foreign countries
The Dominance of the Largest Transnational Corporations - answer the United
Nations reports there are now 82000 transnational corporations. Of these, the 100
largest nonfinancial corporations are 12 percent of the number but have a
disproportionately great impact on the global economy. All but 10 are from the US,
Europe, and Japan.
foreign affiliated - answer business entities in foreign countries controlled by parent
transnational corporations
transnationality index (TNI) - answer the average of three ratios: foreign assets to
total assets, foreign sales to total sales, and foreign employment to total employment
foreign direct investment - answer funds invested by a parent MNC for starting,
acquiring, or expanding an affiliate in a foreign nation
portfolio investment - answer the limited, speculative purchase of stocks and bonds
in a foreign company by individuals or equity funds
sovereign wealth fund - answer a government entity that invests the savings of a
nation. Since it is state-owned, its investment goals may be different from those of
private equity funds
international codes of conduct - answer voluntary, aspirational statements by MNCs
that set forth standards for foreign operations
Sullivan Principles - answer a 1977 code of conduct that required multinational
corporations in South Africa to do business in a nondiscriminatory way
soft law - answer statements of philosophy, policy, and principle found in nonbinding
international agreements that, over time, gain legitimacy as guidelines for interpreting
the "hard law" in legally binding agreements
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