Chapter 1

Question 1

Agglomeration (Clustering)

Answer 1

Locating areas with numerous competition and suppliers

Question 2

Born Global Companies/countires

Answer 2

Founded as international company; founders had international experience and advances in communications for global markets/suppliers

Question 3

Collaborative Agreement

Answer 3

Umbrella Term: companies working together- contractually

Question 4

Foreign Direct Investment (FDI)

Answer 4

Investor takes a controlling interest in a company

Question 5

Franchising

Answer 5

Contractually assigns a trademark as an “essential asset”

Question 6

Globalization

Answer 6

The widening set of interdependent relationships of people from various nations; eliminates some barriers

Question 7

International Business

Answer 7

All commercial transactions, including sales and investments, generally for profit; gov’t may undertake for profit or other reasons

Question 8

Joint Venture

Answer 8

2 or more companies sharing ownership of FDI or controlling interest

Question 9

Licensing Agreement (for royalties)

Answer 9

Allows another company use assets: trademarks, patents, copywrights, expertise; they receive earnings called royalties

Question 10

Management Contract

Answer 10

Arrangements in which one company provides personnel to perform general/specialized management functions

Question 11

Merchandise Export

Answer 11

Tangible products/goods sold abroad

Question 12

Merchandise Imports

Answer 12

Tangible products/goods purchased from abroad

Question 13

Multinational Corporation (MNC)

Answer 13

Any company with foreign direct investments

Question 14

Multinational Enterprise (MNE)

Answer 14

Company with FDI’s

Question 15

Offshoring

Answer 15

Moving production/services to a foreign country- typically to save money

Question 16

Portfolio Investment

Answer 16

Non-controlling interest investment

Question 17

Reshoring

Answer 17

Bringing production/services back from foreign country

Question 18

Royalty

Answer 18

Payments for licensing agreement

Question 19

Service import/export

Answer 19

Services sold to/purchased from abroad

Question 20

Sovereignty

Answer 20

A country should act loyally and without externally imposed restrictions

Question 21

Strategic Alliance

Answer 21

Collaborative agreement that is “critically important” to one of the companies

Question 22

Transnational Company (TNC)

Answer 22

Term used by United Nations for MNE/MNC

Question 23

Turnkey Operation

Answer 23

Services provided and turned over after completion- often construction