Week 1 Flashcards
What is an international business
A business that engages in intentional economic activities or doing business abroad
What is a global business
A business that does both domestic and international business activities
What is an MNE?
A Multi-national enterprise that engages in foreign direct investment and operates in multiple countries
What is FDI?
Foreign Direct Investment is when a business invests in another country, for example, a USA car manufacturer launching dealerships in Japan
What is GNP?
Gross national product is the value added by domestic firms, households and government operating in an economy
What is GDP?
Gross Domestic Product is the total value of goods and services from within a country usually measured in a year
What is GNI?
It is GDP plus income from international sources abroad
What is PPP?
Purchasing Power Parity is a metric that used a basket of goods to compare the value between different currencies
What is globalization?
Where the advancements in technology/transportation lead to businesses operating on international scales
What is globalization?
Where the advancements in technology/transportation lead to businesses operating on international scales
What is an institution-based view?
That formal and informal institutions are behind the performance of businesses
What are formal institutions?
Contracts, governments, laws and policies for example.
What are informal institutions?
Cultural values, socially shared rules, usually things that are unwritten.
What is a resource-based view?
It is the premise that a firms performance is based upon its internal resources and capabilities leading to the sucess
What is the difference between resource-based and institution-based views?
Institution-based focuses on the external environment and resource-based focuses on the internal environment.
What does the ‘liability of outsidership’ infer?
It infers that when a business enters a foreign market, problems arise because of the limitations of networks and contacts in those international markets
What is mercantilism?
The idea that a nations wealth is best if exports are high and imports are low
What is absolute advantage?
The ability one or a group has to carry out an economic activity more efficiently than another
What is the theory of comparative advantage?
It is the theory that an economies ability to produce a good or service at a lower opportunity cost than it’s trading partners
What is an opportunity cost?
The loss in benefit or value when making a certain decision
What is the theory of the product life cycle?
It divides products into three categories, new, maturing, and standardized. With five stages in the products life cycle
What is the strategic trade theory?
Defined as government policy which attempts to shift oligopolistic profits from international markets towards the home country
