Foreign Direct Investment

AFM – Nov 2016 – L3 – Q2b – International investment and financing decisions

Compare the advantages and disadvantages of setting up a subsidiary versus licensing for KK Chemicals and suggest ways to mitigate blocked funds risk.

Question

KK Chemicals Ltd, an Accra-based manufacturer of paints, sells its products only in Ghana. Currently, the company wants to expand into other African countries. The directors are considering two options: setting up its own subsidiary company to manufacture and sell the products or licensing a company based in the host country to manufacture and sell the products.

Required:
i) Advise the directors on TWO potential advantages and TWO disadvantages to KK Chemicals of setting up its own subsidiary company to handle production and sale in the host country as against licensing a company in the host country. (4 marks)

ii) Suppose KK Chemicals elects to set up a subsidiary in the host country. Suggest to the directors TWO ways of dealing with the risk of blocked funds. (2 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Foreign Direct Investment, International Expansion, Licensing, Risk Management, Subsidiary
Level: Level 3

Topic: International investment and financing decisions
Series: NOV 2016

AFM – May 2018 – L3 – Q1a – Economic environment for multinational organisations

Explaining strategic reasons for engaging in foreign direct investment (FDI).

Question

There are many strategic reasons for Multinational Enterprises to undertake foreign direct investment (FDI) to stimulate economic activity in the host country.

Required:
Explain TWO strategic reasons for engaging in FDI. (2 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Economic Activity, FDI, Foreign Direct Investment, Multinational Enterprise, Strategic Reasons
Level: Level 3

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Series: MAY 2018

AFM – Nov 2016 – L3 – Q2b – International investment and financing decisions

Compare the advantages and disadvantages of setting up a subsidiary versus licensing for KK Chemicals and suggest ways to mitigate blocked funds risk.

Question

ii) Suppose KK Chemicals elects to set up a subsidiary in the host country. Suggest to the directors TWO ways of dealing with the risk of blocked funds. (2 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Foreign Direct Investment, International Expansion, Licensing, Risk Management, Subsidiary
Level: Level 3

Topic: International investment and financing decisions
Series: NOV 2016

AFM – May 2018 – L3 – Q1a – Economic environment for multinational organisations

Explaining strategic reasons for engaging in foreign direct investment (FDI).

Question

There are many strategic reasons for Multinational Enterprises to undertake foreign direct investment (FDI) to stimulate economic activity in the host country.

Required:
Explain TWO strategic reasons for engaging in FDI. (2 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Economic Activity, FDI, Foreign Direct Investment, Multinational Enterprise, Strategic Reasons
Level: Level 3

Topic: Economic environment for multinational organisations
Series: MAY 2018

Question Tag: Foreign Direct Investment

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AFM – Nov 2016 – L3 – Q2b – International investment and financing decisions

Compare the advantages and disadvantages of setting up a subsidiary versus licensing for KK Chemicals and suggest ways to mitigate blocked funds risk.

AFM – May 2018 – L3 – Q1a – Economic environment for multinational organisations

Explaining strategic reasons for engaging in foreign direct investment (FDI).

AFM – Nov 2016 – L3 – Q2b – International investment and financing decisions

Compare the advantages and disadvantages of setting up a subsidiary versus licensing for KK Chemicals and suggest ways to mitigate blocked funds risk.

AFM – May 2018 – L3 – Q1a – Economic environment for multinational organisations

Explaining strategic reasons for engaging in foreign direct investment (FDI).

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Question Tag: Foreign Direct Investment

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AFM – Nov 2016 – L3 – Q2b – International investment and financing decisions

Compare the advantages and disadvantages of setting up a subsidiary versus licensing for KK Chemicals and suggest ways to mitigate blocked funds risk.

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AFM – May 2018 – L3 – Q1a – Economic environment for multinational organisations

Explaining strategic reasons for engaging in foreign direct investment (FDI).

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AFM – Nov 2016 – L3 – Q2b – International investment and financing decisions

Compare the advantages and disadvantages of setting up a subsidiary versus licensing for KK Chemicals and suggest ways to mitigate blocked funds risk.

You're reporting an error for "AFM – Nov 2016 – L3 – Q2b – International investment and financing decisions"

AFM – May 2018 – L3 – Q1a – Economic environment for multinational organisations

Explaining strategic reasons for engaging in foreign direct investment (FDI).

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