Which Is Not Generally True of Foreign Direct Investment by Multinational

question 15

Multiple Choice

Which is not generally true of Foreign Direct Investment by Multinational Enterprises?

• A) It tends to increase overall investment in the recipient country
• B) They tend to pay higher wages than local firms
• C) It tends to result in a transfer of technology to the recipient country
• D) It tends to be more volatile than other foreign financing
• E) They tend to undertake more research and development than local firms

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Definitions:

Core

Wealthy countries with developed economies.

Periphery

Poor countries that are exploited for their raw materials by core countries.

World System Theorists

Scholars who analyze the socio-economic differences and inequalities among countries based on the global division of labor and the distribution of resources.

Modernization Theory

A theory that suggests developing countries will progress economically and socially by adopting Western-style capitalism and cultural values.