Question:

Note: (Very important Guide for the assignment: Read this first paragraph carefully. If the question require a sub topic to answer it, feel free to break the question down and answer it accordingly, remember you are treating this as an essay. )

This Exam is meant to inspire your thinking about the topics we have been studying in class so far this semester.

In answering these questions, explore the issues as deeply as you can and integrate our class discussions on these topics and your textbook (Charles W. L. Hill and Tomas Hult, International Business: Competing in the Global Marketplace, 12th Ed, McGraw-Hill/Irwin Publishing, Boston, 2016.) and article readings into your arguments while synthesizing these into comprehensive essays. Bring into your discussion ideas from the cases we discussed in class.

Answer both of these questions in a total of 10 typewritten pages, plus 2 pages of charts and/or graphs, if you'd like to include these.

Question 1: One of the themes we have been discussing in class this semester has focused on the institutional environment of international business. In this context, we focused on the evolution of the international monetary system and monetary institutions that facilitate international trade and investment. (1a) Marking the benchmarks along your route (ie, Bretton Woods, Smithsonian, Jamaica, Plaza, and the Louvre Accords, etc), trace this evolution from its origins in the gold standard, through the fixed and the floating exchange rate systems to the managed float system.

(1b) Comment on the merits of each of these systems and discuss why you feel the fixed, the floating, or the managed float system is better for today's world economy to function more effectively.

(1c) in your judgment, what roles should national governments and international institutions, ie, the IMF, play in working with these systems?

(1d) how would you recommend that we reform this system so that it will function much more effectively? [In addition to our class discussions, you may consult the readings I placed on BB in answering this question]

Question 2: Another theme we have been exploring has been the internationalization of the firm. In this context, we discussed theories that explain why international trade and investment take place, what the gains from these are, and how these gains might be distributed. Our analyses of the Philips vs. Matsushita and the Global Wine Wars cases have helped us understand these issues. In this context:

(2a) compare and contrast EITHER (A) the international product life cycle (Vernon) and the oligopolistic reaction (Knickerbocker) theories, OR (B) the comparative advantage (Ricardo) and the competitive advantage of nations (Porter) theories in terms of their power in explaining trade and investment flows.

(2b) Bring into your discussion the monopolistic advantage (Schumpeter, Hymer) and the liability of foreignness (Zaheer) arguments that explain how these might work in the theories you discussed above.

(2c) In your view, which of these theories explain(s) today's trade and investment flows best and why?

(2d) Do you believe that the eclectic theory (Dunning) is the all-encompassing theory it is purported to be? Why or why not?