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Key Terms Ch.1-5

8 globalization of markets ongoing economic

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8. Globalization of markets - Ongoing economic integration and growing interdependency of countries worldwide. 9. International business - Performance of trade and investment activities by firms across national borders. 10. International investment - Transfer of assets to another country or the acquisition of assets in that country. Also known as ‘foreign direct investment’ (FDI). 11. International portfolio investment - Passive owner-ship of foreign securities such as stocks and bonds, in order to generate financial returns.
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12. International trade - refers to an exchange of products and services across national borders. Trade involves both products (merchandise) and services (intangibles). Exchange can be through exporting, an entry strategy involving the sale of products or services to customers located abroad, from a base in the home country or a third country. 13. MNEs - Multinational enterprise (MNE) : A large company with substantial resources that performs various business activities through a network of subsidiaries and affiliates located in multiple countries. E.g., Caterpillar, Samsung, Unilever, Vodafone, Disney. 14. SMEs - Small and Medium-Sized Enterprise (SME) : Typically, companies with 500 or fewer employees, comprising over 90% of all firms in most countries. SMEs increasingly engage in international business. Chapter 2 1. Contagion – The rapid spread of a financial or monetary crisis from one country to another. 2. Globalization of Markets - refers to the gradual integration and growing interdependence of national economies. Globalization allows firms to view the world as an integrated marketplace that includes buyers, producers, suppliers, and governments in different countries. 3. Value Chain - is the sequence of value-adding activities performed by the firm in the course of developing, producing, marketing, and servicing a product. 4. World Trade Organization (WTO) - Over time, national governments have greatly reduced trade and investment barriers. The trend is partly facilitated by the World Trade Organization (WTO), an organization of some 150 member nations. 5. 5 Drivers of Market Globalization – • Worldwide reduction of barriers to trade and investment • Market liberalization and adoption of free markets • Industrialization, economic development, and modernization • Integration of world financial markets • Advances in technology
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8 Globalization of markets Ongoing economic integration and...

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