Who conducts IB and the 'new' types of firms (topic 3)

Question 1

MNE

Answer 1

Owns income generating assets in a number of countries;
Direct investment occurs across national boundaries in a foreign affiliate, namely in: an associate firm, a subsidiary firm, a 50:50 JV, a WOS;
Control of this foreign affiliate is secured (FDI occurs, not FPI).

Question 2

Factors of production

Answer 2

Capital equipment, technological and marketing knowledge, intellectual property rights, managerial resources/skills, finance.

Question 3

Born global

Answer 3

Exports very soon after launch, without much long-term preceding activity.

Question 4

Outsourcing

Answer 4

The process of contracting work to other companies in order to focus on key activities.

Question 5

Offshoiring

Answer 5

The process of shifting production to a foreign country.

Question 6

MNE/MNC

Answer 6

FDI in 5-6 foreign countries, or more.

Question 7

Transnational corporation (TNC)

Answer 7

FDI in at least one non-domestic country.

Question 8

International firm

Answer 8

Exports/imports/contracts in only one non-domestic country.