Business Decision Making in the Global Environment Flashcards
(13 cards)
Front
Back
What is the difference between clean and dirty floating exchange rates?
Clean float is determined solely by market forces; dirty float includes government intervention.
What is a turnkey project in international business?
A non-equity entry mode where a firm sets up a facility for a client and hands it over ready to operate.
What does the free-market view on FDI promote?
Unrestricted FDI flows so countries can specialize based on comparative or absolute advantage.
How does the resource-based view differ from the institution-based view?
Resource-based focuses on internal firm strengths; institution-based focuses on adapting to external rules and norms.
What is cross-market retaliation?
Responding to an attack in one market by striking back in a competitor’s other markets.
What is strategic hedging?
Spreading operations across regions to offset currency risks through diversification.
What are the components of the OLI framework?
Ownership advantages, Location advantages, and Internalization advantages for FDI.
What is a primary first-mover advantage?
Ability to shape industry standards and reduce uncertainty before competitors enter.
Which classical trade theory sees global wealth as fixed?
Mercantilism, which views trade as a zero-sum game.
What is a non-tariff barrier and give an example?
A trade restriction not based on price; example: import quotas or VERs.
