laatste lecture

Question 1

Institutional (Economic) Theory: Behavioral Assumptions

Answer 1

when making decisions we dont always evaluate everything to make the best choice

1. bounded reality: you just choose which one is good enough (you dont have the time and energy to check every iPhone model, you choose which one is good enough)

self interest
opportunistic behavior
try to maximize your utility (egoism, I want the best for my company even though I may not be loyal to other companies)

Question 2

why do we need IB strategy

Answer 2

• bounded rationality
• assymetric info
• irrational behavior
• time limitation
• uncertainty
  etc

Question 3

LIABILITY OF FOREIGNNESS

Answer 3

this is about the disadavantages that a MNE experience when operating in a foreign country.

• spatial difference
• unfamilairy
• lack of legitimacy
• home country restrictions

Question 4

globalization of markets, 3 causes
(barriers, taste preference, standardized)

Answer 4

1. falling barriers
2. global tastes are converging
3. firms offer standardized products (the same no matter where they’re sold)

Question 5

globalization of production

Answer 5

taking advantage of the differences in cost and quality of factors of production

Question 6

impediments

Answer 6

are barriers/obstacles (like barriers to FDI, political and economical risk)

Question 7

driver of globalization

Answer 7

• decline trade and investment barriers
• technological chanhe
• institutions

Question 8

Outward stock of FDI

Answer 8

outward means in another country.

if you invest as Germany in another company, the investment belongs to gemarnys outward stock of FDI, not the other country

Question 9

sovereignty

Answer 9

the full right and power to the state itself, no outside forces

Question 10

THE GLOBAL ENTREPRENEUR, HBR ISENBERG, 2008

Answer 10

usually new companies start local and then grow but Eisenberg says some countries start globally.

they do this because
1. better opportunities
2. access to international markets

he says even small companies can do this, you do not have to be a big company for this

Question 11

entry mode choice

Answer 11

choice of the form of operation firms use to enter their foreign markets

Question 12

entry mode choice why is it crucial

Answer 12

1. COMMITMENT
   STRATEGIES (EXPLORATION VS EXPLORTATION
2. RISK AND UNCERTAINTY
3. LEARNING

Question 13

ENTRY MODE CHOICE, WHICH MAIN FACTORS TO CONSIDER

Answer 13

DISTANCES
MOTIVATION
HOST COUNTRY MOTIVATION
STRATEGU

Question 14

LICENSING

Answer 14

ROYALTY FREE

Question 15

Ricardo focused on

Answer 15

labor productivity