Chapteer 6 Vocab - Global Business

Clustering of economic activities in certain locations

Ability to extract favorable outcome from negotiations due to one party's strengths

The reaction of local firms to rise to the challenge demonstrated by MNEs through learning and imitation.

The reaction of local firms to rise to the challenge demonstrated by MNEs through learning and imitation.

The risk associated with unauthorized diffusion of firm-specific know-how.

FDIA type of vertical FDI in which a firm engages in a downstream stage of the value chain in a host country.

(1) Government's confiscation of foreign assets; (2) Activities that enrich controlling shareholders at the expense of minority shareholders.

The amount of FDI moving in a given period (usually a year) in a certain direction.

Inward FDI moving into a country in a year.

Outward FDI moving out of a country in a year.

Total accumulation of inward FDI in a country or outward FDI from a country during a given period (usually several years).

investment in a portfolio of foreign securities such as stocks and bonds.

a political view that suggests that FDI unrestricted by government intervention is the best.

A type of FDI in which a firm duplicates its home country- based activities at the same value chain stage in a host country.

Knowledge diffused from one firm to others among closely located firms.

The replacement of cross-border markets (such as exporting and importing) with one firm (the MNE) locating and operating in two or more countries.

international transactions between two subsidiaries in two countries controlled by the same MNE.

Procedures to resolve disputes between foreign investors and host-country governments

Firm A's agreement to give Firm B the rights to use A's proprietary technology (such as a patent) or trademark (such as a corporate logo) for a royalty fee paid to A by B. This is typically done in manufacturing industries.

Advantage enjoyed by firms in a certain location.

The right to appoint key managers and establish control mechanisms

the imperfect rules governing international transactions

The deal struck by MNEs and host governments, which change their requirements after the initial FDI entry.

A firms quest for ownership (O) advantages, location (L) advantages, and internalization (I) advantages via FDI.

industry dominated by a few number of players

An MNE's possession and leveraging of certain VRIO assets overseas in the context of FDI.

A political view that only approves FDI when its benefits outweigh its costs.

A political view that is hostile to FDI.

A state-owned investment fund composed of financial assets such as stocks, bonds, real estate, or other financial instruments funded by foreign exchange assets.

Cost that a firm has to endure even when its investment turns out to be unsatisfactory

Efforts to minimize taxes.

Jurisdiction that offers low taxes as a primary way to attract investment

Technology diffused from foreign firms to domestic firms.

A type of vertical FDI in which a firm engages in an upstream stage of the value chain in a host country.

A type of FDI in which a firm moves upstream or downstream at different value chain stages in a host country.