CH 9 - Regulating Multinational Corporations

Question 1

Performance requirement

Answer 1

A target imposed on the local affiliate of an MNC by the host-country government in order to promote a specific economic objective

Question 2

Export-processing zone (EPZ)

Answer 2

Industrial estates where the government provides land, utilities, transportation infrastructure, and, in some cases, buildings to investing firms, usually at subsidized rate.

Question 3

Obsolescing bargain

Answer 3

Explains how an MNC and a host country government divide income generated by an MNC investment in the host country - asserts that MNC has a bargaining advantage in the pre-investment negotiations

Question 4

Locational incentives

Answer 4

Offered by governments to MNCs - are designed to reduce the cost of, and thereby increase the return from, a particular investment.

Question 5

Calvo doctrine

Answer 5

Argues that no government has the right to intervene in another country to enforce the private claims of that government’s citizens

Question 6

Trade-related investment measure (TRIM)

Answer 6

A government policy toward fdi or MNCs that has an impact on the country’s imports and exports.

Question 7

Multilateral Agreement on Investment (MAI)

Answer 7

A document that laid out international rules governing the treatment of MNCs by governments