Foreign Direct Investment: Concepts, Impacts, and Strategies Study Guide
Explore the fundamental concepts of Foreign Direct Investment (FDI), including its definition, measurement (flow vs. stock), and directional aspects (inflows vs. outflows). Understand the primary entry strategies companies use for FDI, such as Greenfield investments and Mergers & Acquisitions. Analyze the significant economic impacts of FDI on both host and home countries, covering benefits like resource transfer and job creation, as well as costs like increased competition and potential job los
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Introduction to Globalization and Its Facets
Introduction to Globalization and Its Facets
Globalization refers to the shift toward a more integrated and interdependent world economy through the globalization of markets, production, and consumers.
- Globalization of markets
- Globalization of production
- Globalization of consumers
- Drivers of globalization
- Technological change
- Decline of barriers
- Cross-border acquisition
- Factors of production
- National sovereignty
- Labor policies
- Environmental impact
- Trade balance
Differences in Political and Economic Systems
Country Differences in Political Economy
This content explores how political systems and economic systems differ across countries and the implications of these differences on economic development.
- Collectivism
- Individualism
- Democracy
- Totalitarianism
- Communist totalitarianism
- Theocratic totalitarianism
- Tribal totalitarianism
- Right-wing totalitarianism
- Market economy
- Command economy
- Mixed economy
- Representative democracy
- Socialism
- Communism
- Social democrats
Understanding the Cultural Environment
Understanding the Cultural Environment
This content explores the determinants of culture, including values, norms, social stratification, and the differences between individuals and groups.
- Culture definitions
- Values and norms
- Folkways and mores
- Nation-states and subcultures
- Individuals and groups
- Social stratification
- Social mobility
- Caste system
- Class system
International Trade Theories and Government Policy
International Trade Theories and Government Policy
This topic explains why nations trade with each other and distinguishes different theories that explain trade flows between nations.
- Mercantilism
- Absolute advantage
- Comparative advantage
- Porter's theory of national competitive advantage
- Free trade
- Factor endowments
- Government policy in international trade
Concepts and Implications of Foreign Direct Investment
Understanding Foreign Direct Investment
An overview of foreign direct investment trends, theories, benefits, costs, and government policy instruments.
- Foreign direct investment (FDI)
- FDI flow
- FDI stock
- FDI inflow
- FDI outflow
- Greenfield investment
- Acquisitions and mergers
- Host country benefits
- Home country benefits
- Resource-transfer effects
- Employment effects
- Balance-of-payments effects
- National sovereignty and autonomy
- Government policy instruments
- World Trade Organization (WTO)
Understanding Foreign Direct Investment (FDI)
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Regional Economic Integration Overview
Levels and Cases of Regional Economic Integration
Regional economic integration involves levels of economic integration including free trade area, customs union, common market, economic union, and political union.
- Free trade area
- Customs union
- Common market
- Economic union
- Political union
- Trade creation
- Trade diversion
- European Union political structures
- Single European Act
- Euro establishment
Regional Economic Integration and Trade Blocs
This content examines various regional economic integration models including NAFTA, CUSMA, the Andean Community, MERCOSUR, BRICS, and ASEAN.
- Andean Community
- MERCOSUR
- BRICS countries
- Central American Common Market
- CAFTA-DR
- CARICOM
- ASEAN
- Customs union
- Common market
- Free trade area
- Trade diversion
International Business Strategy and Global Competition
The Strategy of International Business
A study guide explaining how firms expand globally through various strategies to manage cost reductions and local responsiveness.
- Strategy
- Profitability
- Profit growth
- Value creation
- Differentiation
- Low-cost emphasis
- Value chain
- Strategic fit
- Economies of scale
- Experience effects
- Transfer skills
- Cost reductions
- Local responsiveness
- Global standardization strategy
- International strategy
- Localization strategy
- Transnational strategy
Roles of Global Institutions
Overview of Global Institutions
Global institutions help manage, regulate, and police the global marketplace and promote the establishment of multinational treaties.
- Global institutions
- United Nations
- World Trade Organization
- International Monetary Fund
- World Bank
- International law
- International monetary system
- Economic development
- IBRD
- IFC
- MIGA
- ICSID
Overview of Global Institutions and Their Roles
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Economic Systems, Property Rights, and Development
Economic Systems, Property Rights, and Development
This text examines economic systems, property rights protection, and determinants of economic development.
- Market economy
- Mixed economy
- Command economy
- Public action
- Private action
- Intellectual property
- Patents
- Copyrights
- Trademarks
- Gross National Income
- Gross Domestic Product
- Purchasing Power Parity
- Human Development Index
- Life expectancy at birth
- Education attainment
Innovation, Entrepreneurship, and Economic Development
Innovation and entrepreneurial activity serve as engines of long-run economic growth within market economies characterized by strong property rights and specific political systems.
- Innovation
- Entrepreneurship
- Market economy
- Planned economy
- Mixed economy
- Property rights
- Political systems
- Democracy
- Totalitarian regimes
- Geography
- Education
- Economic development
Market-Based Systems and Economic Transformation
This content examines the spread of market-based systems, the nature of economic transformation, and various legal systems.
- market-based systems
- command economies
- mixed economies
- deregulation
- privatization
- legal systems
- property rights
- common law
- civil law
- theocratic law
- Islamic law
Religion, Ethics, and Determinants of Culture
The Cultural Environment and Determinants
This content explores the cultural environment through class consciousness, religion, and ethical systems such as Hinduism and Confucianism.
- Class consciousness
- Religion
- Ethical system
- Christianity
- Islam
- Hinduism
- Confucianism
- Caste system
Absolute Advantage, Comparative Advantage, and Trade
International Trade Theories and Specialization
A study of absolute advantage and comparative advantage theories explaining how specialization and trade increase consumption.
- Absolute Advantage
- Comparative Advantage
- Specialization
- Free Trade
- Production and Consumption
Regional Economic Integration and Trade Agreements
Regional Economic Integration in Africa
Regional trade blocs in Africa include the East African Community and the African Continental Free Trade Area aiming to unify trade.
- Regional trade blocs
- African Continental Free Trade Area (AfCFTA)
- East African Community (EAC)
- Economic integration
- Free trade area
- Trade facilitation measures
- Implications for business
Drivers, Demographics, and Debates of Globalization
Drivers of Globalization and Technological Change
Two macro factors underlie the trend toward greater globalization: decline in barriers to the free flow of goods, services, and capital, and technological change in communication, information processing, and transportation.
- Drivers of Globalization
- Declining Trade and Investment Barriers
- Technological Change
- Globalization of Production
- Globalization of Markets
- Communication Technology
- Information Processing
- Transportation Technology
- Containerization
- Internet and World Wide Web
Globalization and the Changing Global Economy
The changing demographics of the global economy involve globalization trends, anti-globalization debates, and managing in the global marketplace.
- Changing demographics of the global economy
- Share of world output
- World exports and imports
- Developing economy to industrial superpower status
- Foreign Direct Investment (FDI)
- Technological decoupling
- Anti-globalization debate
- Outsourcing
- Labor policies
- Environmental impact
- National sovereignty
- World's poor
- Cross-border transactions
- Currency conversion
Implications of the Changing Political Economy
Implications of Changing Political Economy
The overall attractiveness of a country as a potential market or investment site depends on balancing the likely long-term benefits, costs, and risks associated with doing business in that country.
- comity of nations
- contract law
- United Nations Convention on contracts for the International sale of goods
- property rights
- first-mover advantages
- late-mover disadvantages
- political risk
- economic risk
- legal risk
Ethics and Human Rights in International Business
An examination of political systems, economic systems, and ethical dilemmas facing international businesses.
- collectivism vs. individualism
- democratic vs. totalitarian systems
- market economy
- command economy
- mixed economy
- property rights
- product safety and liability laws
- contract law
- deregulation
- privatization
- ethics and human rights
- bribes and corruption
- populism and nationalism
- globalization and cooperation
Culture, Language, and International Business Implications
The Cultural Environment in International Business
- Spoken language
- Unspoken language
- Nonverbal communication
- Education as a determinant of national competitive advantage
- Hofstede's dimensions
- Power distance
- Individualism versus collectivism
- Uncertainty avoidance
- Masculinity versus femininity
- Motivation Towards Achievement and Success
- Long-term versus short-term orientation
- Cross-cultural literacy
- Ethnocentrism
- Culture and business ethics
- Core human values
International Trade Theories and Business Implications
International Trade Theories and Implications
- Ricardo theory
- Product Life-Cycle Theory
- New Trade Theory
- Economies of scale
- Comparative advantage
- Factor endowment
- Location implications
- Policy implications
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