C211 Study Guide questions

C211 Study Guide questions What is Foreign Direct Investment? - ANSWER is direct investment in, control, and management of value-added activities in other countries. What different political views exist on FDI? - ANSWER Radical, Free Market, and Pragramatic Nationalism What benefits exist to a country receiving FDI? - ANSWER Capital inflow, Technology, management, job creation What costs exist to a country receiving FDI? - ANSWER Loss of sovereignty, adverse effects on competition, and capital outflow How do resources and capabilities influence the competitive dynamics of a business? - ANSWER Value, rarity, imitibility, and organization (VRIO) Globalization new view - ANSWER A new force sweeping through the world in recent times Evolutionary globalization view - ANSWER long-run historical evolution since the dawn of human history "Pendulum" view on globalization - ANSWER One that swings from one extreme to another from time to time What is resource similarity and how does this impact competitive dynamics? - ANSWER The degree to which two firms with similar resources are likely to have competitive actions. ie: market commonality Give a description of the classical theory of international trade. - ANSWER The major theories typically studied consist of mercantilism, absolute advantage, and comparative advantage How would the modern theory compare to the classical theory? - ANSWER the major theories typically studied consist of product life cycle, strategic trade, and national competitive advantage. Absolute advantage - ANSWER involves being more efficient than anyone else in the production of any good or service comparative advantage - ANSWER is the relative (not absolute) advantage in one absolute activity that one nation enjoys in comparison with other nations Mercantilism - ANSWER Classical trade theory that viewed international trade as a zero-sum game What are the critical features of the product life cycle? - ANSWER An economic theory that accounts for changes in the patterns of trade over time How would you describe strategic trade? - ANSWER A theory that suggests that strategic intervention by governments in certain industries can enhance their odds for international success How are supply and