Introduction to International Business

Question 1

Forms of International Business

Answer 1

• Trade
• Licensing
• Foreign Direct Investment

Question 2

Is the import or export of goods and services across
national borders, usually as part of an exchange.

Answer 2

Trade

Question 3

Activities of Trading

Answer 3

• Exporting
• Importing
• Trade in Services

Question 4

is the shipment of goods out of a country
or the rendering of services to a foreign buyer located in
a foreign country.

Answer 4

Exporting

Question 5

is the entering of goods into the customs
territory of a country or the receipt of services from a
foreign provider.

Answer 5

Importing

Question 6

refers to the providing of services
to a customer or the operation of service companies in a
foreign country.

Answer 6

Trade in Services

Question 7

Types of Exporting

Answer 7

• Direct Exporting
• Foreign Sales Representative
• Foreign Distributors
• Indirect Exporting

Question 8

refers to a type of exporting in
which the exporter, often a manufacturer, assumes
responsibility for most of the export function, including
marketing, export licensing, shipping and collecting
payment.

Answer 8

Direct Exporting

Question 9

firm use specialized intermediaries
that can take on many of the export functions– marketing,
sales finance, and shipping.

Answer 9

Indirect Exporting

Question 10

are independent sales agents who solicit orders on behalf of their principals and receive compensation on a commission basis.

Answer 10

Foreign Sales Representative

Question 11

are independent firms, usually
located in the country or region to which a firm is
exporting , that purchase and take delivery of goods for
resale to their customers.

Answer 11

Foreign Distributors

Question 12

Types of Intermediaries

Answer 12

• International Trading Companies
• Export Management Companies

Question 13

these are firms that
specialize in all aspects of import or export transactions
by either buying goods on their own accounts for resale
or by acting as middlemen to bring other buyers an sellers
together

Answer 13

International Trading Companies

Question 14

these are independent firms that assume a range of export-related responsibilities for manufacturers, producers, or other
exporters.

Answer 14

Export Management Companies

Question 15

One of the most important legal documents used in
import/export transactions.

Answer 15

Certificate of Origin

Question 16

is a legal right which result from the
intellectual activity in the industrial, scientific, literary, and artistic
fields.
* Common forms are Patents, trademarks, copyrights, and trade
secrets.
* Thus, IP owner has the right to use, reproduce, distribute and profit
from its property to license its use or distribution for others. And to
protect it from unauthorized infringement.

Answer 16

Intellectual Property

Question 17

Intellectual Property is a valuable asset that can be transferred
by the owner or holder to licensee through a grant of rights in
that property called a license.

Answer 17

International Licensing Agreements

Question 18

is a valuable asset that can be transferred
by the owner or holder to licensee through a grant of rights in
that property called a license.

Answer 18

Intellectual Property

Question 19

are contracts by which the holder of
intellectual property will grant certain rights (the license) in
that property to another party under specified conditions and a
for a specified time, in return for consideration, such as a fee
or royalty as a part of a larger business arrangement.

Answer 19

Licensing Agreements

Question 20

Specialized agency of the United Nations. Ideally, it
administers an arbitration center to resolve IP disputes
between private parties, such as individual inventors,
corporation, and universities (including patent, trademark,
industrial design, and domain name).

Answer 20

World Intellectual Property Organization (WIPO)

Question 21

refers to the violation of the IP rights of
another, and often occurs in the unauthorized use,
distribution, or appropriation of those rights. It is often
referred to as piracy or counterfeiting.

Answer 21

Infringement

Question 22

it is the process of sharing scientific information, technology,
and manufacturing know-how between firms, universities, or
other institutions.

Answer 22

Transfer of Technology

Question 23

Franchising is a business arrangement that uses an agreement
to license, control, and protect the use of franchisor’s patents,
trademarks, copyrights or business-know-how, combined with
a proven plan of business operation in return for royalties,
fees, or commissions.

Answer 23

International Franchising

Question 24

is a business arrangement that uses an agreement
to license, control, and protect the use of franchisor’s patents,
trademarks, copyrights or business-know-how, combined with
a proven plan of business operation in return for royalties,
fees, or commissions.

Answer 24

Franchising

Question 25

Some Legal Aspects of Franchising

Answer 25

* Regulation of Federal Trade Commission * Enacted Franchise Disclosure Laws * Restrictions on the amount of money the franchisor can remove from the country and others might have restrictions on importing supplies.

Question 26

Refers to the ownership and operation of effective control of the productive assets of an ongoing business by an individual or corporate investor who is a residential or national of another country.

Answer 26

Foreign Direct Investment

Question 27

Forms of Investment

Answer 27

* Foreign Branch * Foreign Subsidiary * Joint Venture * Local Participation

Question 28

a business presence by the investor in the host country. Host country refers to that country under whose laws the investing corporation was created or

Answer 28

Foreign Branch

Question 29

it is a foreign company organized under the laws of a foreign host country but owned and controlled by the parent corporation in the home country.

Answer 29

Foreign Subsidiary

Question 30

is s cooperative business arrangement between two or more companies for profit. It may take the form of a partnership or a corporation.

Answer 30

Joint Venture

Question 31

it means that the share of the business is owned by nationals of the host country.

Answer 31

Local Participation

Question 32

is often used in the United Nations system, reflecting that the corporation’s operations and interests transcend national boundaries.

Answer 32

Transnational Corporations

Question 33

are firms that have significant foreign direct investment assets or that derive a significant position of their revenues from more than one country.

Answer 33

Multinational Corporations

Question 34

* have high per capita income, have a high standard of living, and are in the later changes of industrialization. * characterized by advanced technology, modern production, and management methods, and advanced research facilities. * composed of diversified economies not dependent on oil, agriculture or mining alone.

Answer 34

Developed Countries

Question 35

* have lower per capita income, a lower standard of living, higher foreign debt, more rapid population growth, and a history of greater state control over their economy. * Some rely on petroleum exports as their source of income

Answer 35

Developing Countries

Question 36

* Are developing countries that have made rapid progress toward becoming industrialized or technology-based economies. They are located in all regions of the world including Latin America, Middle East and Southern and Southeast Asia

Answer 36

The Newly Industrialized Countries

Question 37

* Are those defined by the United Nations the basis of several socioeconomic criteria. * Many of these countries have inadequate roads and bridges, inadequate public utilities and telephone systems, poor educational and healthcare facilities, lack of plentiful drinking water and any other economic and societal issues

Answer 37

The Least Developed Countries

Question 38

Common Risks of International Business

Answer 38

* Distance and Logistics * Language and Cultural Differences * Cross-Border Trade Controls * Currency Risk

Question 39

It is one of the concerns in which the risk of refusing to pay for a particular credit can be done in international business.

Answer 39

Distance and Logistics

Question 40

In this are the language disparity is one of the issues since most of the successful business people are not fluent in English.

Answer 40

Language and Cultural Differences

Question 41

The movement of goods is governed by the laws and regulations of the countries to which they pass.

Answer 41

Cross-Border Trade Controls

Question 42

A firm is exposed to currency risk whenever it transacts business in a foreign currency or makes an investment in a host country whose currency is different from a home country.

Answer 42

Currency Risk

Question 43

42. Common Regulations for Trade Control

Answer 43

Export, Controls, and Sanctions

Question 44

is a restriction on export of goods, services or technology to a country or group of countries imposed fro reasons of national security or foreign policy.

Answer 44

Export control

Question 45

are broader and more comprehensive restrictions on trade and financial transactions with countries, who engage in proliferation of weapons of mass destruction.

Answer 45

Sanctions

Question 46

The risk to a firm’s business interest resulting from political instability of civil unrest, political change, war, or terrorism in a country in which the firm is doing business.

Answer 46

Political Risk

Question 47

The transfer of private sector firms to government ownership and control, usually with payment to shareholders and pursuant to a larger plan to restructure a national economy or nationalization.

Answer 47

Political Risk: Loss of the Investor’s Property

Question 48

Types of Currency Risk

Answer 48

* Exchange Rate Risk * Currency Control

Question 49

It results from the fluctuation in the relative value of two currencies when one is exchanged for the other.

Answer 49

Exchange Rate Risk

Question 50

Are restrictions on foreign currency transactions used by some developing countries that do not have large reserves of foreign currency.

Answer 50

Currency Control

Question 51

Types of Losing Investor’s Property

Answer 51

* Expropriation * Confiscation

Question 52

Is the taking by a government of privately owned assets such as real estate, factories, farms, mines, oils, etc.

Answer 52

Expropriation

Question 53

Is expropriation without payment of any compensation.

Answer 53

Confiscation