Term
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Definition
| The principle that equivalent assets sell for the same price. Purchasing power parity is a measurement of a currency's value based on the buying power within its own domestic economy. |
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Term
| Multi-National Corporations |
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Definition
| A corporation with operations in more than one country. |
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Term
| Foreign Direct Investment (FDI) |
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Definition
| Foreign direct investment (FDI) occurs when an individual or firm acquires controlling interest in productive assets of another country. |
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Term
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Definition
| International outsourcing involves the import of intermediate inputs or services from unaffiliated foreign suppliers. |
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Term
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Definition
| selling the same standardized product and using the same basic marketing approach in each national market |
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Term
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Definition
| customizing products and marketing strategies to specific national conditions |
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Term
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Definition
| "Firm that typically starts to export less than two years after the foundation of the firm"… "these firms view the world as their marketplace from the outset and see the domestic market as a support for their international business"… average born globals' exports account for 75% of their sales |
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Term
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Definition
| An advantage over competitors gained by offering consumers greater value, either, through lower prices or by providing more benefits that justify higher prices |
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Term
| Porter's Diamond of National Advantage |
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Definition
| A conceptual model that characterizes a country's resources that lead to competitive industries and firms. The four points of the diamond represent the types of resources: demand conditions; factor conditions; related and supporting industries; firm strategy, structure, and rivalry |
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Term
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Definition
| A country that is in the process of becoming industrialized. Average national income must be below $9,265 for a country to be classified as a developing country. A developing country typically lacks industrialization, infrastructure, high literacy rate and advanced living standards. |
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Term
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Definition
| An emerging market has a very high growth rate, which yields enormous market potential. It is distinguished by the recent progress it has made in economic liberalization. |
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Term
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Definition
| codes of conduct that prescribe how people should act |
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Term
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Definition
| routine social conventions of every day life |
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Term
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Definition
| beliefs about what is good, right, desirable, or beautiful |
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Term
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Definition
| a group of people with a shared culture |
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Term
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Definition
| the set of shared norms, values, symbols, rituals, and practices that are learned by a society through institutions, including family, schools, and religion |
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Term
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Definition
| divisions in a society whose members share similar values, interests, and behaviors |
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Term
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Definition
| the extent to which the less powerful members of institutions and organizations expect and accept that power is distributed unequally |
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Term
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Definition
| a society in which ties between individuals are loose: everyone is expected to look after himself or herself and his or her immediate family only |
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Term
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Definition
| a society in which emotional gender roles are clearly distinct: men are supposed to be assertive, tough, and focused on material success; women are supposed to be more modest, tender, and concerned with the quality of life |
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Term
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Definition
| the extent to which the members of a culture feel threatened by ambiguous or unknown situations. |
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Term
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Definition
| fostering of virtues oriented toward future rewards, in particular perseverance and thrift |
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Term
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Definition
| in low context societies, much of the information is conveyed explicitly in a message; whereas in high context societies, the meaning of a message may be contained in the particular context of the conversation. |
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Term
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Definition
| the ability of individuals or groups to move into and out of different social classes |
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Term
| Country of Origin Effects |
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Definition
| the extent to which the place of manufacturing influences product evaluations |
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Term
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Definition
| the political, economic, and legal systems of a country |
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Term
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Definition
| the governmental and societal actions and policies, originating either within or outside the host country, and negatively affecting either a select group of, or the majority of foreign business operations and investments |
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Term
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Definition
| A specific type of political risk in which a government seizes foreign assets |
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Term
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Definition
| A process whereby privately owned companies are brought under state ownership and control |
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Term
| Local Content Requirement |
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Definition
| A requirement that some specific fraction of a good be produced domestically. |
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Term
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Definition
| Taxes on imported goods and services, levied by governments to raise revenues and create barriers to trade |
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Term
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Definition
| The quantity of goods of a specific kind that a country permits to be imported without restriction or imposition of additional duties. |
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Term
| Voluntary Export Restraint |
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Definition
| One country promises another country to limit its imports; this is often done when the promising country fears increased tariffs or quotas if it does not self-regulate. |
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Term
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Definition
| A sales tax collected at each stage of production in proportion to the value added during that stage. |
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Term
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Definition
| A process whereby publicly owned enterprises are sold to private investors |
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Term
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Definition
| the removal of various government controls on an economy |
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Term
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Definition
| A state-owned investment fund composed of financial assets such as stocks, bonds, property, precious metals or other financial instruments. |
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Term
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Definition
| A post-World War II agreement designed to promote freer international trade among the nations of the world. The GATT was replaced by the World Trade Organization (WTO) in 1994. |
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Term
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Definition
| The WTO is a multilateral organization that promotes free and fair trade among the nations of the world. It was created in 1994 by 121 nations at the Uruguay Round. |
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Term
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Definition
| An international organization created at Breton Woods in 1944 to help in the reconstruction and development of its member nations. Its goal is to improve the quality of life for people in the poorer regions of the world by promoting sustainable economic development. See also International Bank for Reconstruction and Development. |
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Term
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Definition
| An international organization designed to promote global economic stability and development. It compiles statistics on cross-border transactions and publishes a monthly summary of each country’s balance of payments. |
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Term
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Definition
| A country accords no less favorable treatment to imported goods than it does to domestic goods. |
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Term
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Definition
| A status granted to one country by another; the granting country then accords the recipient's imports and exports the most favorable treatment that it accords any country. |
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Term
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Definition
| A tariff assessed as a percentage of the value of an import. |
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Term
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Definition
| The rationale for the “temporary protection” of a new industry or firm in order to help it become established domestically and later become competitive worldwide. These protections consist of tariff and non-tariff barriers to imports, preventing global competition from entering the market. |
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Term
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Definition
| An intergovernmental organization which coordinates foreign, economic, and judicial policy among its 27 member nations. |
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Term
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Definition
| Exchange-rate today for settlement in two days. |
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Term
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Definition
| An agreement to purchase or sell a defined amount of forward currency in the future at a certain fixed rate. |
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Term
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Definition
| An increase in a currency value relative to another currency in a floating exchange rate system. |
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Term
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Definition
| A decrease in a currency value relative to another currency in a floating exchange rate system. |
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Term
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Definition
| Changes in the value of contractual (monetary) cash flows as a result of changes in currency values. |
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Term
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Definition
| Changes in a corporation’s financial statements as a result of changes in currency values. Also known as accounting exposure. |
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Term
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Definition
| Change in the value of a corporation’s assets or liabilities as a result of changes in currency values. |
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Term
| Foreign Corrupt Practices Act (FCPA) |
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Definition
| U.S. law against making payments to foreign government officials for special treatment |
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Term
| Fixed Exchange Rate System |
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Definition
| An exchange rate system in which governments stand ready to buy and sell currency at official exchange rates. Fluctuations of this currency are not possible. |
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Term
| Floating Exchange Rate System |
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Definition
| An exchange rate system under which a government is not obligated to declare that its currency is convertible into a fixed amount of another currency. Rather, the exchange rates are settled by market forces |
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Term
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Definition
| When goods produced or sold in one country (with the consent of the rights owner), are then sold in another country. |
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Term
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Definition
| A trading partnership, based on dialogue, transparency and respect, which seeks greater equity in international trade. Includes paying an "above-market" price to suppliers and seeking certification from some standards setting agency. |
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Term
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Definition
| the Chinese concept of a personal connection based on reciprocity |
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