Introduction to IB chapter 12 Flashcards
Natural resource-seeking FDI
Foreign direct investment driven by the desire to access natural resources available in specific locations
Market-seeking FDI
Foreign direct investment aimed at entering countries that exhibit strong demand for the investor’s products and services
global cities
Cities with interconnectedness, cosmopolitanism and abundance of advanced producer services
Efficiency-enhancing FDI
Foreign direct investment focused on identifying the most efficient locations for various activities within the value chain
Capability-enhancing FDI
Foreign direct investment aimed at acquiring new ideas and technologies to improve the investor’s technological and managerial capabilities
Non-equity modes
Methods of market entry that do not involve owning any equity in a local firm
Equity modes
Methods of market entry that do not involve owning any equity in a local firm.
Wholly owned subsidiary (WOS)
A subsidiary in a foreign country that is completely owned by the parent multinational company
Strategic alliance
A partnership between independent firms that may involve equity modes, non-equity contractual agreements, or a combination of both for collaboration
Greenfield investments
Building factories and offices from scratch
Partial acquisition
Acquisitions where a firm purchases an equity stake in another company without gaining full ownership
Scale of entry
The level of resources allocated for entering a foreign market
Platform investment
An investment that establishes a small presence or foothold in a specific market or location
Brownfield acquisition
An acquisition where additional investment is made to improve or overlay the existing organization
Staged acquisitions
Acquisitions where the transfer of ownership occurs in multiple phases or stages
