Firms for which licensing is not a good option include those in

A. low-technology industries.

B. global oligopolies.

C. industries characterized by low cost pressures.

D. industries where transportation costs are high.

E. industries which need to have low control over foreign operations.

Answer: B. global oligopolies

Although it normally involves much longer-term commitments, franchising is essentially the service industry version of

A. exporting.

B. licensing.

C. foreign direct investment.

D. greenfield investment.

E. diversifying.

Answer: B. licensing

To encourage inward FDI, it is increasingly common for governments to

A. offer tax concessions to foreign firms that invest in their countries.

B. exclude foreign companies from specific industries.

C. require that local investors own a significant proportion of the equity in a joint venture.

D. impose high custom duties on foreign firms.

E. prohibit MNEs from joining a cartel.

Answer: A. offer tax concessions to foreign firms that invest in their countries

Host governments use a range of controls to restrict inward FDI. The two most common are

A. monetary restraints and prohibition on investing in certain countries.

B. voluntary export restrictions and employment restraints.

C. ownership restraints and performance requirements.

D. tax concessions and government-backed insurance.

E. employment restraints and tax deductions.

Answer: C. Ownership restraints and performance requirements