Chapter 1 Flashcards
International business (IB)
(1) A business (firm) that engages in international (cross border) economic activities, and/or (2) the action of doing business abroad.
Multinational enterprise (MNE)
A firm that engages in foreign direct investment.
Foreign direct investment (FDI)
Investment in, controlling, and managing value-added activities
in other countries.
Emerging market
A term that is often used interchangeably with “emerging
economy.”
Great Transformation
Transformation of the global economy that is embodied by the tremendous shift in economic weight and engines of growth toward emerging economies in general and BRIC(S) in particular.
Triad
North America, Western Europe, and Japan.
Base of the pyramid (BoP)
Economies where people make less than US$2,000 per capita
per year.
Group of 20 (G-20)
The group of 19 major countries plus the EU whose leaders meet on a biannual basis to solve global economic problems.
Purchasing power parity (PPP)
A conversion that determines the equivalent amount of goods and services that different currencies can purchase.
Expatriate manager (expat)
A manager who works abroad.
International premium
A significant pay raise when working overseas.
Liability of foreignness
The inherent disadvantage that foreign firms experience in host countries because of their nonnative status.
Globalization
The close integration of countries and peoples of the world.
Risk management
The identification and assessment of risks and the preparation to minimize the impact of high-risk, unfortunate events.
Scenario planning
A technique to prepare and plan for multiple scenarios (either high- or low-risk).
Semiglobalization
A perspective that suggests that barriers to market integration at borders are high, but not high enough to insulate countries from each other completely.
Non governmental organization (NGO)
An organization that is not affiliated with governments.
BRIC
Brazil, Russia, India, and China.
BRICS
Brazil, Russia, India, China, and South Africa.
Emerging economy
A term that has gradually replaced the term “developing country” since the 1990s.
Global business
Business around the globe.
Gross domestic product (GDP)
The sum of value added by resident firms, households, and governments operating in an
economy.
Gross national income (GNI),
GDP plus income from nonresident sources abroad. GNI is the term used by the World Bank and other international organizations to supersede the term GNP.
Gross national product (GNP)
GDP plus income from nonresident sources abroad.
Reverse innovation
An innovation that is adopted first in emerging economies and is then diffused around the world.
