Chapter 2

Question 1

globalization of markets

Answer 1

• ongoing economic integration and growing interdependency of national economies
• globalization both compels and facilitates firms to expand abroad (internationalize)

Question 2

internationalization of firms

Answer 2

the tendency of companies to deepen their international business activities systematically

Question 3

first phase (period)

Answer 3

1830 to late 1800s, peaking in 1880

Question 4

first phase (triggers)

Answer 4

introduction of railroads and ocean transport

Question 5

first phase (key characteristics)

Answer 5

rise of manufacturing: cross-border trade of commodities, largely bu trading companies

Question 6

second phase (period)

Answer 6

1900 to 1930

Question 7

second phase (triggers)

Answer 7

rise of electricity and steel prodcution

Question 8

second phase (key characteristics)

Answer 8

emergence and dominance of early MNEs (mainly from Europe and North America) in manufacturing, extractive, and agricultural industries

Question 9

third phase (period)

Answer 9

1948 to 1970s

Question 10

third phase (triggers)

Answer 10

formation of the General Agreement on Tariffs and Trade (GATT); conclusion of World War II; Marshall Plan to reconstruct Europe

Question 11

third phase (key characteristics)

Answer 11

focus by industrializing Western countries to reduce trade barriers; rise of MNEs from Japan; development of global capital markets; rise of global trade names

Question 12

fourth phase (period)

Answer 12

1980s to about 2006

Question 13

fourth phase (triggers)

Answer 13

Privatization of state enterprises in transition economies; revolution in information, communication, and transportation technologies; remarkable growth of emerging markets

Question 14

fourth phase (key characteristics)

Answer 14

Rapid growth in cross-border trade of products, services, and capital; rise of internationally active S M E s and services firms; rising prosperity of emerging markets

Question 15

fifth phase (period)

Answer 15

2007 to present

Question 16

fifth phase (triggers)

Answer 16

Rise of digital technologies, and other new technologies, which are boosting manufacturing productivity and the efficiency of international trade in services

Question 17

fifth phase (key characteristics)

Answer 17

Leveraging technology to facilitate trade and local production; rising trade in digitally enabled services but slowing growth of trade in merchandise goods

Question 18

offshoring

Answer 18

the relocation of manufacturing and other value-chain activities to cost-effective locations abroad

Question 19

reshoring

Answer 19

MNEs sometimes engage — the return of manufacturing and services back to the home country