Module 2

Question 1

What are the 4 factors for globalization according to Thompson (1998)?

Answer 1

1. The collapse of the Cold War.
2. The trend towards policies of liberalization, de-regulation and privatization.
3. The creation of inter-governmental organizations.
4. The increased interdependencies and integration in the world economy.

Question 2

Explain the collapse of the Cold War as a factor fro globalization.

Answer 2

The struggle between two ideological formations - locked all wolrd issues into a single geo-military dimension.
ex. Ukraine

Question 3

Explain the trend towards policies of liberalization, de-regulation and privatization as a factor for globalization.

Answer 3

Although often perceived as a result of internationalization and globalization of economic activity, they are usually rather driven by domestic decisions and policy changes.
ex. Water supplies are beggining to be privatized.

Question 4

Explain the creation of inter-governmental organization as factor for globalization.

Answer 4

Inter-governmental organizations such as the OECD, WTO, IMF and the World Bank open up the world economies and reduce protectionist barriers.
ex. Creation of global trends to avoid an economic war.

Question 5

Explain the increased interdependencies and integration in the world economy as a factor for globalization.

Answer 5

The increased interdependencies and integration in the world economy since 1945.
ex. Trade blocs and free trade areas (NAFTA between USA, Canada and Mexico).

Question 6

Ukraine starts to have the same problem.
a. Collapse of the Cold War
b. Trend towards policies of liberalization, de-regulation and privatization
c. Creation of inter-governmental organizations
d. Increased interdependancies and integration in the world economy.

Answer 6

a.

Question 7

Water supplies are beginning to be privatized.
a. Collapse of the Cold War
b. Trend towards policies of liberalization, de-regulation and privatization
c. Creation of inter-governmental organizations
d. Increased interdependancies and integration in the world economy.

Answer 7

b.

Question 8

Creation of global trends to avoid economic war.
a. Collapse of the Cold War
b. Trend towards policies of liberalization, de-regulation and privatization
c. Creation of inter-governmental organizations
d. Increased interdependancies and integration in the world economy.

Answer 8

c.

Question 9

Trade blocs and free trade areas (NAFTA between USA, Canada and Mexico).
a. Collapse of the Cold War
b. Trend towards policies of liberalization, de-regulation and privatization
c. Creation of inter-governmental organizations
d. Increased interdependancies and integration in the world economy.

Answer 9

d.

Question 10

The economic system of “varieties of capitalism” of Hall and Soskice can be understood as:
a. Liberal market economies, coordinated market economies and mized market economies.
b. State and political system, education and labor system, financial system, cultural system.

Answer 10

a.

Question 11

The economic system of “national business system” of Whitley can be understood as:
a. Liberal market economies, coordinated market economies and mized market economies.
b. State and political system, education and labor system, financial system, cultural system.

Answer 11

b.

Question 12

What can be used to analyze political systems?

Answer 12

1. Degree of collectivism versus individualism.
2. Degree of democracy versus totalitarianism.

Question 13

What are typical issues in entrepreneurship?
a. Limited resources.
b. Transfer risk.
c. Ownership risk.
d. Conflict and changes in the solvency of the country.
e. Monetary risk.
f. All of the above

Answer 13

a.b.c.d.

Question 14

Which of the following are reflects gaps in the countries’ basic knowledge of the Western system:
a. Business plans
b. Product promotion, marketing and profits
c. Feasible rates of return
d. Non-convertibility of the currency
e. Differences between accounting systems
f. Communications
g. All of the above

Answer 14

g.

Question 15

Direct economic aspects: creating a business strategy for a multi-country area means dealing with differences in:
a. Levels of economic development
b. Currency valuations
c. Government regulations
d. Banking, venture capital, marketing and distribution systems
e. Communications
f. All of the above

Answer 15

a.b.c.d.

Question 16

When was the General Agreement on Tariffs and Trade (GATT) established? What is it objective?

Answer 16

1947. Liberalizing trade by eliminating or reducing tariffs, subsidies, and import quotas.

Question 17

What is the most-favored-nation (MFN) principle?

Answer 17

Countries usually cannot discriminate against any GATT member states, types of import or in any way that affects trade negatively.

Question 18

What is the liberlization principle?

Answer 18

Through negotiations obstacles to free trade globally should be reduced.

Question 19

What is the reciprocity principle?

Answer 19

A country granting trade advantages to other member states is to be granted in turn equivalent privileges by these.

Question 20

When and why was the International Monetary Fund (IMF) established.

Answer 20

After WW2 to increase currency stability and elasticity of the exchange rate environment compared to the (fixed exchange rate-based) Gold standart used previously. Forbids IMF member states to use exchange rate adjustments to address competitiveness issues. An IMF member state’s quota determines its voting power.

Question 21

True or false. The nature of economic institutions will evolve and converge with the need for resolution of grand challenges / wicked problems.

Answer 21

True. Global (Eco-)Institutional Convergence.

Question 22

What is an economic opportunity?

Answer 22

The potential to achieve profit. They are also referred as market gaps or impefections.

Question 23

Opportunity drivers: Link letters and numbers
1. Costs
2. Capital
3. Consumers
4. Climate
5. Consciousness
6. Convergence

a. Declining costs of clean technology, increasing costs of natural resources, increasing internalization of externalities.
b. Increasing investor and governemtn funding of social and environmental enterprises
c. Increasing desire to purchase green products.
d. Increasing alignment between economic incentives and positive social and environmental outcomes.
e. Global climate change.
f. Increasing public awareness of environmental and social issues.

Answer 23

1a
2b
3c
4e
5f
6d

Question 24

What is the biggest opportunity?

Answer 24

Creating socially and ecologically sustainable value by bringing together a unique combination of resources to pursue an economic opportunity. Includes value created for the individual entrepreneur and society and its members that simultaneously sustains or enhance ecosystem services and resources.

Question 25

What are the 2 phases of the process of new firm creation (Total Entrepreneurial Activity (TEA) index)?

Answer 25

1. Start-up pahse: resources are assembled, products or servies defined, a team is organized, and the strategy for implementing the new firm is developed (opportunity exploitation).
2. New firm phase: initial period after trade/business begins when a new initiative (<42 months old) is in the market.

Question 26

True or false. The TEA index gives the % share of individuals that are always active in both the start-up phase and the new-firm phase relative to all citizens in a country that are betweem 18-70 years old.

Answer 26

False. The TEA index gives the % share of individuals that are active in either the start-up phase or the new firm pahse relative to all citizens in a country that are between 18-64 years old.