1. Which of the following best exemplifies how informal institutions govern MNEs?

a. The US has few laws limiting US firms from creating subsidiaries overseas, but there is often a vocal backlash from the public over domestic job loss.

b. MNEs coming into the US have relatively few restrictions, as long as they do not practice illegal dumping or price setting.

c. MNEs based in the US must advance quickly into foreign markets to beat competitors and take care of opportunities, but these moves are often slowed by legal regulations and entry barriers.

d. The laws governing MNEs based in the US are always changing.

2. Which of the following best describes the motive for appointing a host country national as head manager in a MNE subsidiary?

a. They are familiar with the intricate workings of the MNE.

b. They are independent of the local traditions and MNE so act as a neutral leader.

c. They are familiar with the local informal institutions and market.

d. Host country nationals are never appointed as head manager.