Chapter 1 Flashcards
Agglomeration (Clustering)
Locating areas with numerous competition and suppliers
Born Global Companies/countires
Founded as international company; founders had international experience and advances in communications for global markets/suppliers
Collaborative Agreement
Umbrella Term: companies working together- contractually
Foreign Direct Investment (FDI)
Investor takes a controlling interest in a company
Franchising
Contractually assigns a trademark as an “essential asset”
Globalization
The widening set of interdependent relationships of people from various nations; eliminates some barriers
International Business
All commercial transactions, including sales and investments, generally for profit; gov’t may undertake for profit or other reasons
Joint Venture
2 or more companies sharing ownership of FDI or controlling interest
Licensing Agreement (for royalties)
Allows another company use assets: trademarks, patents, copywrights, expertise; they receive earnings called royalties
Management Contract
Arrangements in which one company provides personnel to perform general/specialized management functions
Merchandise Export
Tangible products/goods sold abroad
Merchandise Imports
Tangible products/goods purchased from abroad
Multinational Corporation (MNC)
Any company with foreign direct investments
Multinational Enterprise (MNE)
Company with FDI’s
Offshoring
Moving production/services to a foreign country- typically to save money
Portfolio Investment
Non-controlling interest investment
Reshoring
Bringing production/services back from foreign country
Royalty
Payments for licensing agreement
Service import/export
Services sold to/purchased from abroad
Sovereignty
A country should act loyally and without externally imposed restrictions
Strategic Alliance
Collaborative agreement that is “critically important” to one of the companies
Transnational Company (TNC)
Term used by United Nations for MNE/MNC
Turnkey Operation
Services provided and turned over after completion- often construction
