C211 OA

view that claims phenomenon of globalization was initially driven by the desire of Western economies to exploit their power through MNE's - answer-new view that claims globalization is a long-run historical evolution since the dawn of humanity. Says it is nothing new and that it will always exist - answer-evolutionary view that claims globalization is swinging from one extreme to another from time to time - answer-pendulum investment in, controlling, and managing value-added activities in other countries - answer-foreign direct investment political view hostile to FDI. believes it is an instrument of imperialism and vehicle for exploitation of domestic resources by foreign capitalists and firms - answer-radical suggests that FDI, unrestricted by government intervention, will enable countries to tap into their absolute or comparative advantages by specializing in the production of certain goods and services - answer-free market views FDI as having pros and cons and only approving FDI when its benefits outweigh costs - answer-pragmatic nationalis what benefits exist to a country receiving FDI? - answer-capital inflow, technology spillovers, advanced management know-how, creates jobs what costs exist to a country receiving FDI? - answer-loss of sovereignty, adverse effects on competition, net outflow in the capital account The aggregation of importing and exporting that leads to the country-level trade surplus or deficit. - answer-balance of trade firms with a _____ degree of resource similarity are likely to have similar competitive actions - answer-high a high degree of resource similarity but low market commonality = _______ intensity of rivalry - answer-highest little resource similarity but high market commonality = _____ intensity of rivalry - answer-lowest mercantilism, absolute advantage and comparative advantage belong to what theory of international trade - answer-classical theory of international trade that relies on more realistic product life cycles and first mover advantages - answer-modern under free trade, a nation gains by specializing in economic activities in which it has _____advantage - answer-absolute focuses on the idea that if a country does not have absolute advantage, they can still choose to specialize in the production of one good where it has ______ advantage - answer-comparative comparative advantage and absolute advantage stem from - answer-factor endowments theory that the wealth of the world is fixed and that a nation that imports more and exports less will be richer - answer-mercantilism stage of the product life cycle where production of a new product that commands a price premium will concentrate in the US - answer-new stage of the product life cycle where demand and ability to produce grow in other developed nations - answer-maturing stage of the product life cycle where the previously new product is commoditized and production will now move to low-cost developing nations - answer-standardized comparative advantage may change over time because patterns of ______ change over time - answer-trade theory that suggests that intervention by governments in certain industries can enhance their odds for international success - answer-strategic trade if a company seeks to limit foreign exchange rate exposure in the forward direction, what is the most effective way to do this? - answer-currency hedging exchange rate risk associating with the time delay between entering a contract and settling it - answer-transaction risk forward transaction that protects traders and investors from exposure to fluctuations of the spot rate - answer-hedging a means of spreading out activities in different currency zones in order to offset the currency losses in certain regions through gains in other regions - answer-strategic heding amount of resources committed to entering a foreign market - answer-scale of entry how do institutions reduce uncertainty? - answer-by signaling which conduct is legit and which is not pillar of formal institution, coercive power of government - answer-regulatory pillar of informal institution, the mechanism through which norms influence individual and firm behavior - answer-normative pillar of informal institution, taken for granted values and beliefs that guide behavior - answer-cognitive institutions represented by laws, regulations and rules - answer-formal institutions represented by norms, culture and ethics - answer-informal the necessity of making rational decisions in the absence of complete information - answer-bounded rationality bounded rationality is a position in which view of global business - answer-institution political system that affects global business with an individuals right to freedom of expression and organization - answer-democracy political system that affects global business with hostility towards business, higher political risk such as nationalism - answer-totalitarianism political system where citizens elect representatives to govern the country on their behalf - answer-democracy political system where one person or party exercises absolute political control over the population - answer-totalitarianism law that uses comprehensive statutes and codes as a primary means to form legal judgements - answer-civil law that is shaped by precedents and traditions from previous judicial decisions - answer-common