INTRODUCTION TO INTERNATIONAL BUSINESS AND TRADE Flashcards
globalization in 1870 to 1914 ended due
to breakout of WW1 in 1914
The gravity model shows the size of economies is _____ associated with bilateral trade
positively
_______ across national boundaries is another measure or indicator of economic integration and globalization in the world economy
international flow of people (migration) and capital
driving force of globalization
- increase in and application of technology
- liberalization of cross-border trade and resource movement
- development of services that support international business
- growing consumer pressures
- increased global competition
- changing political situations
- expanded cross-national cooperation
a mechanism to bring about globalization
international business
gravity model for world trade
Tij = A x Yi x (Yj/Dij)
types of international organization
- collaborative arrangements
- strategic alliance
- multinational enterprises (MNEs)
why companies engage in international business
- sales expansion
- resource acquisition
- risk minimization
Gravity models continue to show a strong negative relationship between
distance and international trade
factors affecting foreign trade environment
- Economic
- Technological
- Geographical
- Political-legal
- Socio-cultural
- Demographic
deals with exports and imports trade
international trade
cost of globalization
- threats to national sovereignty
- economic growth and environmental stress
- growing income inequality and personal stress
- offshoring involves the transferring of production abroad
deals with wholesale and retail
domestic trade
Six (6) benefits of trade
- Specialization and improved resource allocation
- Economies of Scale
- Transfer of Technology
- Wider Market
- Increase Consumption Possibility
- Goodwill
people migrate for economic reasons
- improved standard of living
- more opportunities
- escape from political and religious oppression
increases efficiency in the production of material things
globalization
this relates the trade between any two countries to the sizes of their economies and distance
The Gravity Model
modes of operation in international business
- merchandise exports
- merchandise imports
- service exports
- service imports
- foreign direct investment (FDI)
the gravity model indicates that bilateral trade between nations is _____ affected by their distance
negatively
on-going process that deepens and broadens the relationships and interdependence among countries
globalization
why do countries trade?
mutual benefit
the three period of globalization
- 1870 - 1914
- 1945 - 1980
- 1980 - present
