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Exam_2_Review - Exam 2(Dec.13 Tuesday 3-5pm 1345...

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Exam 2 (Dec.13 Tuesday 3-5pm @ 1345 Engineering Building) *Closed book exam Approx. 15-20 MC Questions and True False Questions 3-4 Short Answer Questions (ample choice) 1 Short Essay Question (ample choice) Lectures Transnational Corporations (TNCs) Concepts and explanations: o Why do firms grow? After growing in size, you can only grow geographically (?) o What are the limits to the size of individual firm? Costs of organizing transactions within firms increases as size of firm increases There are limits to managerial or entrepreneurial organization skills – monitoring and control costs increase as the size of the firm increases o Transnational Corporation : A firm that has the power to coordinate and control operations in more than one country, even if it does not own them. o Why do firms transnationalize? Drive for profit Circuits of Capital Firm specific assets Location-specific factors Spatial manifestation of Product Life Cycle Are TNCs becoming placeless? NO What is Transnationality index (TNI)? What does it reveal? o TNI : Average of foreign assets to total assets, foreign sales to total sales, and foreign employment to total employment. o Most TNCs are national corporations with international operations Biggest TNCs have relatively low TNI scores Explain: Are TNCs becoming placeless or not? Two main reasons and each has several a. No, strong connections of TNCs w/ home country because: Links between ownership-specific advantages of firms and location- specific characteristics of home country US: large market, high tech Japan: Lack of natural resrouces, govt involvement Etc. b. There are constraints on the global reach of TNCs Time-space compression of competition Rise of anti-globalization movements Social/cultural barriers to expansion The Emerging Countries and National Systems of Political Economy Terminology and Concepts:
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o First world : refers to so called developed, capitalist , industrial countries, roughly, a bloc of countries aligned with the United States after World War II, with more or less common political and economic interests: North America, Western Europe, Japan and Australia. o Second world : refers to the former communist-socialist , industrial states, (formerly the Eastern bloc, the territory and sphere of influence of the Union of Soviet Socialists Republic) today: Russia, Eastern Europe (e.g., Poland) and some of the Turk States (e.g., Kazakhstan) as well as China. o Third world : are all the other countries, today often used to roughly describe the developing countries of Africa, Asia and Latin America. o NICs : Newly Industrialized Countries East Asian Tiger economies Latin American Developmental states o Emerging economy: o BRIC(S) : Brazil, Russia, India, China o Nation : Group of people sharing common cultural traits, may or may not have defined territory o State : Geographical space, population, authority structure, externally recognized sovereignty o Nation-state : Where the two overlap (what a great definition…) o
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Exam_2_Review - Exam 2(Dec.13 Tuesday 3-5pm 1345...

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