N1082 INTERNATIONAL BUSINESS ENVIRONMENT
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BSc EXAMINATION 2020/21
N1082 INTERNATIONAL BUSINESS ENVIRONMENT
1. In 2016, about 144,000 people from the UK travelled for treatment to hospitals and clinics abroad, while about 58,000 people from abroad came to the UK for treatment (Source: The International Passenger Survey). Discuss the impact of this (i.e. who benefits from this and who loses from this) inbound and outbound medical tourism.
2. Country X, Y, and Z charge 50% tax on imported products.
The production cost of products P, Q, and R in the three countries are as follows:
Country |
Product P |
Product Q |
Product R |
X |
110 |
130 |
250 |
Y |
130 |
80 |
200 |
Z |
80 |
60 |
320 |
Assuming there are no costs in transporting the goods across these three countries, the following table illustrates which country’s product will be the most price competitive in each market:
Host country |
Product P |
Product Q |
Product R |
X |
Locally produced product |
Imported from country Z |
Locally produced product |
Y |
Imported from country Z |
Locally produced product |
Locally produced product |
Z |
Locally produced product |
Locally produced product |
Imported from country Y |
Now country X and Y form a regional trade agreement named XYRTA. Countries within XYRTA do not charge a tax on imported products from the member countries, but charge a 50% tax on imported products from the countries outside the XYRTA (non-member countries). Country Z continues to charge 50% tax on imported products.
Explain what is trade creation and trade diversion, and illustrate trade creation and trade diversion that take place as a result of establishing XYRTA. Based on this scenario, critically discuss the following statement: ‘Trade creation is good, but trade diversion is bad’ .
3. One of the small scale domestic automobile manufacturers in the UK that pioneered a new
type (new technology) of electrical car is considering to expand internationally and would like to enter the Chinese market first (to manufacture the car in China and sell to Chinese customers). The automobile manufacturer is now evaluating whether to establish a joint venture in China or License the technology to a firm in China. In this context, compare and contrast the following two entry modes:
a) Establishing a joint venture with a local firm in China
b) Licensing the technology to a firm in China
4. Discuss how cultural differences between the host country and the home country can matter for MNEs’ foreign market operations.
5. Explain Carroll’s CSR Pyramid and discuss why MNEs give priority to CSR today.
6. Discuss how digitalization influences MNEs in their strategies and how they organise their international operations. What are the challenges of the digitalization for MNEs in developed and developing countries?
2023-01-11