5. Give some reasons which are significant motives for the formation of multinational enterprises?
a. Avoiding tariffs by obtaining foreign manufacturing facilities
b. Obtaining the benefits from overseas comparative advantages
c. The acquisition of natural resource supply sources
6. Give a reason which is not significant motive for the formation of multinational enterprises?
Subsidies financial support by the home government to overseas corporations
7. Trade analysis between MNE and Conventional trade is that multinational enterprise analysis emphasizes (the last 2 slides):
The international movement of factor inputs rather than finished goods
8. Foreign Direct Investment has taken the following forms:-
a. The creation of a wholly owned business enterprise overseas
b. The takeover of an existing company overseas
c. The construction of a manufacturing plant overseas
Parent company diversifies into nonrelated markets in order to provide more products or acquire new customers