4.

11 Sample examination questions

1. Critically assess the major theories of trade. What challenges and implications do these theories throw up
for companies looking to operate internationally?
2. a. When is it attractive for an MNE to make foreign direct investment into a country?
b. What role can a host government play in supporting, or slowing, such foreign direct investments?
c. Why would a foreign country want to resist foreign direct investment?
d. What can an MNE do to make FDI attractive to the host country?

2016 Zone B
4. ‘At the heart of contemporary globalisation are the phenomena of international trade and foreign direct
investment.’ Therefore:
(a) Explain the three main modern trade theories. (12 marks)
(b) How does Dunning’s OLI framework explain the occurrence of foreign direct investment? (6 marks)
(c) Why might a country wish to restrict inflows of foreign direct investment? Give examples. (7 marks)

2018 Zone A q2 and Zone B q 4 (part b from ch4 section 4.4 & 4.5 and part c from chapter 7 section 7.5)
2. ‘The trends toward globalisation can seem overwhelming, and therefore business strategy
straightforward, but international businesses still encounter major challenges because of country
differences.’ In light of this statement, discuss the following, using illustrative examples:
a) What are the main trends towards globalisation? (9 marks)
b) Discuss six ways in which countries and governments can choose to intervene in markets, and create
challenges for foreign businesses. (9 marks)
c) Describe Ghemawat’s AAA strategic framework, its strengths and limitations, and how it can be used for
defining a strategy for the global marketplace.
(7 marks)

2018 Zone B
8. ‘Foreign Direct Investment (FDI) is an activity of growing importance for many international firms and for
many countries in the world today.’ Therefore:
a) Explain the meaning of the term FDI. (5 marks)
b) Explain, with suitable conceptual content and illustrative examples, the OLI framework. (12 marks)
c) What might be the possible benefits of FDI for consumers, workers, suppliers and the government of a
country that is successful in attracting such inflows? (8
marks)