How did Apple’s tax strategies in Ireland impact global governance discussions?

They led to greater scrutiny of tax avoidance by MNEs

What is a core critique of FDI in weak institutional environments?

It may enable MNEs to undermine governance and labour protections

Why is the Democratic Republic of Congo considered an example of economic dependency?

Foreign MNEs control most of the country’s extractive industries & profits

What was one of the key failures of Venezuela’s oil-dependent economy?

Over-reliance on oil exports led to economic instability and hyperinflation

According to Institutional Theory, why do MNEs seek legitimacy in host countries?

To gain long-term operational stability and market acceptance

What was one major criticism of Shell’s impact on Nigeria’s institutional quality?

It reinforced weak governance structures through regulatory capture

Which of the following is an example of an MNE reinforcing a power imbalance?

Mining firms in the Congo extracting resources with little local benefit

How do MNEs use CSR to maintain legitimacy in host markets?

By aligning CSR initiatives with local institutional priorities

What is a key argument of Institutional Theory regarding MNEs in weak governance environments?

MNEs may exploit institutional weaknesses but can promote regulations

How do MNEs influence world politics?

By shaping regulatory policies and trade agreements

What was a major consequence of Siemens’ corruption scandal?

It strengthened global anti-bribery regulations

What was one unintended consequence of M-Pesa’s success in Kenya?

It increased Kenya’s dependence on foreign technology firms

How can governments reduce economic dependency on MNEs?

By expanding domestic industries and strengthening institution

Which of the following is an example of regulatory isomorphism?

MNEs standardising compliance practices across multiple countries

How does Dependency Theory critique FDI in developing economies?

FDI reinforces economic dependency and limits domestic industrial growth

How does Dependency Theory explain the economic stability of developing nations with high MNE activity?

Emerging markets remain dependent on foreign firms for capital & technology

What is a key factor that makes institutions resilient against MNE influence?

Strong rule of law and accountability mechanisms

How has China’s Belt and Road Initiative affected emerging markets?

It has provided infrastructure while increasing economic reliance on China

What is a primary benefit of MNEs in emerging markets, according to Institutional Theory?

They pressure governments to improve legal and regulatory frameworks

Why do critics argue that MNEs have too much influence on host economies?

They shape legal and economic frameworks to benefit their operations

Why do some MNEs favour operating in weak institutional environments?

Weaker regulations allow for cost-cutting and flexibility in business ops

What is a primary reason MNEs influence global governance?

They shape regulations, trade, and global business practices

Which of the following best describes an institutional void?

A market lacking formal institutions, creating uncertainty for business ops

In what way did Coca-Cola’s operations in India highlight an institutional weakness?

Lack of environmental protections led to over-extraction of water resources

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Week 3 - GPE: CI

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Questions 25

Answers

1
How did Apple’s tax strategies in Ireland impact global governance discussions?
They led to greater scrutiny of tax avoidance by MNEs
They strengthened Ireland’s reputation for corporate transparency
They had no impact on global governance frameworks
They encouraged MNEs to increase tax contributions voluntarily
2
What is a core critique of FDI in weak institutional environments?
It exclusively benefits domestic firms
It has no significant impact on host-country institutions
It may enable MNEs to undermine governance and labour protections
It always leads to long-term economic growth
3
Why is the Democratic Republic of Congo considered an example of economic dependency?
The country has diversified its economy beyond natural resources
Foreign MNEs control most of the country’s extractive industries & profits
The economy is primarily driven by domestic enterprises
The government has strong regulatory control over foreign investment
4
What was one of the key failures of Venezuela’s oil-dependent economy?
Its economy successfully diversified beyond oil
The government maintained strong financial reserves to offset market shocks
Over-reliance on oil exports led to economic instability and hyperinflation
Foreign MNEs took complete control of Venezuela’s oil industry
5
According to Institutional Theory, why do MNEs seek legitimacy in host countries?
To exploit weak governance and institutional gaps
To challenge existing institutional structures
To avoid compliance with regulatory standards
To gain long-term operational stability and market acceptance
6
What was one major criticism of Shell’s impact on Nigeria’s institutional quality?
It reinforced weak governance structures through regulatory capture
It had no significant impact on the country’s legal institutions
It improved Nigeria’s regulatory framework through CSR initiatives
It reduced environmental degradation through sustainable business practices
7
Which indicator is NOT part of the World Bank’s assessment of institutional quality?
Technological innovation
Regulatory quality
Rule of law
Control of corruption
8
Which of the following is an example of an MNE reinforcing a power imbalance?
Toyota investing in local skills training in the UK
Microsoft supporting digital literacy initiatives in Kenya
Mining firms in the Congo extracting resources with little local benefit
Unilever developing supply chains with local farmers in India
9
How do MNEs use CSR to maintain legitimacy in host markets?
By minimising their financial contributions to the local economy
By aligning CSR initiatives with local institutional priorities
By limiting public engagement with host communities
By focusing exclusively on short-term profitability
10
What is a key argument of Institutional Theory regarding MNEs in weak governance environments?
MNEs may exploit institutional weaknesses but can promote regulations
MNEs are unaffected by institutional quality and focus solely on profit
MNEs automatically improve host-country institutions through investment
Institutional quality has no impact on MNE operations
11
How do MNEs influence world politics?
By reducing their presence in emerging markets
By shaping regulatory policies and trade agreements
By operating outside of political institutions
By focusing only on domestic economies
12
What was a major consequence of Siemens’ corruption scandal?
It led to Siemens exiting global markets
It strengthened global anti-bribery regulations
It had no impact on corporate governance frameworks
It reduced public scrutiny of corporate corruption
13
What was one unintended consequence of M-Pesa’s success in Kenya?
It created financial exclusion among rural populations
It increased Kenya’s dependence on foreign technology firms
It reduced the country’s reliance on MNEs for technological infrastructure
It strengthened domestic control over financial services
14
How can governments reduce economic dependency on MNEs?
By limiting foreign investment
By prioritising short-term economic gains from foreign investors
By expanding domestic industries and strengthening institution
By reducing trade barriers to attract more MNEs
15
Which of the following is an example of regulatory isomorphism?
Governments creating entirely unique policies for each foreign investor
MNEs refusing to conform to host-country regulations
MNEs standardising compliance practices across multiple countries
MNEs adapting to different cultural expectations in global markets
16
How does Dependency Theory critique FDI in developing economies?
FDI always results in greater institutional stability
FDI is irrelevant to economic governance
FDI is the primary driver of institutional strengthening
FDI reinforces economic dependency and limits domestic industrial growth
17
How does Dependency Theory explain the economic stability of developing nations with high MNE activity?
Emerging markets remain dependent on foreign firms for capital & technology
MNEs increase domestic control over key industries
Developing nations experience equal benefits as developed economies
MNE investment leads to long-term industrial development
18
What is a key factor that makes institutions resilient against MNE influence?
Strong rule of law and accountability mechanisms
A weak regulatory environment
Low levels of civic engagement
High dependence on foreign capital
19
How has China’s Belt and Road Initiative affected emerging markets?
It has provided infrastructure while increasing economic reliance on China
It has reduced global MNE influence
It has helped developing nations reduce foreign debt
It has eliminated corruption in developing markets
20
What is a primary benefit of MNEs in emerging markets, according to Institutional Theory?
They pressure governments to improve legal and regulatory frameworks
They always align with local institutions to promote economic stability
They prioritise home-country policies over host-country regulations
They operate independently of institutional frameworks
21
Why do critics argue that MNEs have too much influence on host economies?
They shape legal and economic frameworks to benefit their operations
They always act in the best interests of developing nations
They consistently support government-led development initiatives
They operate within clear limits set by international regulations
22
Why do some MNEs favour operating in weak institutional environments?
MNEs seek to strengthen institutional frameworks in such environments
Weaker regulations allow for cost-cutting and flexibility in business ops
These environments provide stronger legal protections for corporations
Weak institutional environments discourage MNE investment
23
What is a primary reason MNEs influence global governance?
They always follow host-country rules without exception
They operate independently of economic policies
They shape regulations, trade, and global business practices
They avoid engaging with political institutions
24
Which of the following best describes an institutional void?
A market lacking formal institutions, creating uncertainty for business ops
An economic system where MNEs operate independently of state intervention
Government policy designed to limit MNE involvement in domestic industries
A highly centralised regulatory environment
25
In what way did Coca-Cola’s operations in India highlight an institutional weakness?
The company’s market entry was blocked by strict regulations
Coca-Cola was unable to establish local partnerships
Lack of environmental protections led to over-extraction of water resources
The government’s regulatory framework was too restrictive for expansion

Week 3 - GPE: CI Flashcards | StudBud