Test 1 review part 10 Flashcards
(11 cards)
Significant changes in today’s global business environment make FDI a possible first step into international trade. (T/F)
True
International business denotes
A) a business with operations in multiple nations.
B) business conducted within a foreign country.
C) an organization with multicountry affiliates.
D) an organization that attempts to standardize operations worldwide E) all of the above F) none of the above
E) all of the above
The establishment of new facilities from the ground up
Greenfield investment
The purchase of an existing business in another country
Cross-border acquisition (Grey Investment)
Theory that foreign direct investment is made by firms in industries with relatively few competitors, due to their possession of technical and other advantages over indigenous firms
Monopolistic advantage theory
Theory suggesting that strategic rivalry between firms in an oligopolistic industry will result in firms closely following and imitating each other’s international investments in order to keep a competitor from gaining an advantage
Strategic behavior theory
Theory that to obtain a higher return on its investment, a firm will transfer its superior knowledge to a foreign subsidiary that it controls, rather than sell it in the open market
Internalization theory
A theory explaining why a product that begins as a nation’s export eventually becomes its import
International product life cycle (IPLC)
In the United States, the federal government shares power with state and local governments. This is an example of ___________
polycentrism
is the existence of multiple centers of power, authority, or influence
Polycentrism
a business strategy in which a company views the world as a single market and tailors its products and services to meet the needs of customers around the globe
Geocentrism
