WEEK 3 Flashcards
refers to commerce in which goods, services or resources across the borders of two or more nations.
International Business
is a border than international business.
Culture, ideas, and beliefs are exchanged in addition to goods, services, and resources.
Globalization
when an entity (country, region, company or individual)
Absolute Advantage
when an entity can produce a particular goo or service at a lower relative opportunity cost compared to another entity.
Comparative Advantage
is the difference between the value of a country’s imports and exports.
Balance of Trade
occurs when a nation imports more than it exports.
Trade Deficit
occurs when a nation exports more than it imports.
Trade Surplus
is the difference between the total flow of money coming into country and the total flow of money going out of a country during a period of time.
Balance of Payments
is a system of exchange in which goods and services are used as payment rather than money.
Countertrade
exchange of goods or services directly for other goods or services without the use of money as means of purchase or payment.
Barter
sale of goods and services to one company in another country
Counterpurchase
a firm builds a plant in a country, or supplies technology, equipment, training, or other services to the country, and agrees to take a certain percentage of the plant’s output as partial payment for the contract.
Buyback
COMMON TYPES OF COUNTERTRADE
Barter
Counterpurchase
Buyback
taking goods that were produced within a company’s home country and shipping them to another country.
Exporting
A good is brought into a jurisdiction, especially across a national border, from an external source.
Importing
contacts out a business process to another party and may include either or both foreign and domestic contracting.
Outsourcing
is the relocation of a business process from one country to another.
Offshoring
usually cover property that is intangible, such as trademarks, images, patents, or production techniques.
License Agreement
a party (franchisee) acquires access to the knowledge, processes, and trademarks of a business (he franchisor) in order to sell a products or service under the business’s (franchise’s) name.
Franchising Agreement
is an investment in the form of controlling ownership in a business enterprise in one country by an entity based in another country.
Foreign Direct Investment
TWO FORMS OF FDI
Greenfield Ventures
Mergers/Acquisition
establishes a new business that is owned by two or more otherwise independent businesses.
Joint Ventures
is formed between two or more corporations, each based in their home country, for a specific period of time.
Strategic Alliance
5 Types of Global Trade Forces
- Sociocultrural Differences
- Political Economy
- Legal Differences
- Physical and Environmental forces
- Tariff and non-tariff restrictions
a type of tax that is levied on goods and services coming into a country.
Import Tariffs
a limit on the amount of quantity of a good or services that can be imported into a country.
Import Quotas
set by the government and require foreign businesses to use a certain quantity of local labor, resources, and/or suppliers in their operations.
Local Content Requirements
official ban on trade or other commercial activity with a particular country.
Embargos
