anra02 Quizlet Intemational Business Miaterm (Ch 1-8) Flashcards | Quzlet International Business Midterm (Ch 1-8) Terms in this set (85) globalization the shift towards a more integrated and inter-depended world economy Globalization is occurring in 2 parts: 1) Globalization of markets 2) globalization of products General Agreement on Tariffs and Trade (GAFF) a trade agreement between the Allied nations after WWII World Trade Organization (WTO) the world forum for international trade International Monetary Fund (IMF) World Bank United Nations International institution that provides loans to countries with payment problems (can't pay bills) Created to help finance countries for globalization CClick on the plus button to add International institution that provid this set to your class Got it International institution that was created to preserve peace and reduce conflict between trading nations. (They agree to seek peace first) International Business a business that engages in international trade or investment in more than 1 country Multinational Enterprises a business that has production activities in more than 1 country political system a system of government in action htpssquile.com/99139047/ntemationa-business-midienm-ch-t-Slash-cards!anra021 Intemational Business Miaterm (Ch 1-8) Flashcards | Quzlet 4 types of political systems 1) Individualism 2) Collectivism 3) Democracy 4) Totalitarianism 3 types of economies 1) market economy 2) command economy 3) mixed economy legal system a system of rules and laws that regulate behavior and provides a process of grievances 3 types laws that exist within legal systems 1) common law 2) civil law 3) theocratic law Contracts for the International Sale of Goods (CIGS) Uniform set of rules that governs commercial contract between different nations property rights the legal rights over the use to which a resource is put and over the use made of any income that may be derived from that resource Property rights can be violated in 2 ways 1) private action 2) public action Foreign Corrupt Practices Act a law that prohibits bribing a foreign government official or maintain a business advantage over which that foreign official has authority (1970s) Intellectual property property that is the product of intellectual activity stents grants the inventor of anew product or process exclusive ° rights for a defined period of time, usually 20 years. the exclusive right to publish and disperse one’s work as they copyrights see it, normally 50 years htpssquile.comv99139047/ntemationa-business-midienm-ch-t-Slash-cards! 28anra021 Intemational Business Miaterm (Ch 1-8) Flashcards | Quzlet trademark the exclusive ownership of a design, name, or symbol, that's officially registered to differentiate their products, normally 99 years World Intellectual Property Organization consists of member nations who pledge to protect intellectual property. Creates a common ground among all rations in treating intellectual property Paris Convention for the Protection of Industrial Property treaty established in 1883 to protect industrial property, In 2004, 169 nations were a part of this, ‘Trade Related Aspects of Intellectual Property Rights (TRIPs) trade agreements among the WTO members to enforce patents lasting at least 20 years and copyrights lasting 50 years product safety laws laws that set certain safety standards to which products must adhere product liability holding a business responsible for its product causing injury, death, or damage Gross Domestic Product (GDP) total market value of all goods and services produced in an economy within a year = Production AND National Wealth Gross National Income (GNI) a measure of the total annual income received by the residents of a nation (accumulated wealth of all residents) Human Development Index (HD!) measures the quality of life in each nation Economic growth sustained growth over a period of time 2 factors that lead to economic growth within nations 1) innovation 2) entrepreneurship cross-cultural literacy understand culture that exist within and across nations culture the valves and norms that are shared by a group of people htps:quilet.comv99139047/ntemationa-business-midienm-ch-t-S-lash-cards! aeanra021 Intemational Business Miaterm (Ch 1-8) Flashcards | Quizlet 4 ways culture is analyzed internationally 1) social organization 2) religion 3) language 4) education strata system/social strata grouping groups of people according to social hierarchy ~ involves a class system or a caste system class system one is born into a class and can move in & out/move up caste system one is born into a class but can't move out or up, 5 dominant religions 1) Christianity 2) Islam 3) Hinduism 44) Buddhism 5) Confucianism ethics system of right and wrong that governs behavior ethical strategy plan that defines what ethics is and explains how a business will go about being ethical ethical dilemma a situation in which there are two valid sides to an argument Ethical lapse when one makes a decision to do wrong 5 common concerns regarding business ethics 1) employment practices 2) human rights 3) environmental pollution 4) corruption 5) moral obiigation 4 theories of business ethics 1) Strawman theory 2) Utiitarian & Kantian theory 3) Rights theory 4) lustice theory htpssquile.comv99139047/ntemationa-business-midienm-ch-t-Slash-cards! 48anra021 Intemational Business Miaterm (Ch 1-8) Flashcards | Quzlet Universal Declaration of Human Rights all members pledged to treat people with equality, dignity, & respect - signed by all members of UN but not all live by it, veil of importance people are ignorant of their own personal characteristics (ex. racism) 3 theories that explain how trade began 1) Mercantilism 2) Theory of Absolute Advantage 3) Theory of Comparative Advantage zero-sum game one benefits at the expense of the other positive-sum game all nations benefit from trade constant returns to specialization as production increases, the resources used to produce remains constant diminishing returns to specialization as production increases, the resources used to produce decreases until they run out - production stops factor endowment resources that a country is endowed Hecksher-Ohlin Theory belief that nations will export goods that use their resources & import those goods that do not use their resources. Leontief paradox Theory = The wealth was caused by being heavy exporters of capital-intensive goods and heavy importer of labor-intensive goods In actuality, the opposite of his original theory occurred. - couldn't explain it (how we got our wealth from labor- intensive products) ~ the answer to the paradox was technology (hiring people > income -> wealth) product life cycle stages that a product goes through in its life (4 stages) New Trade Theory causes the first-mover advantage htpssquile.comv99139047/ntemationa-business-midienm-ch-t-Slash-cards!anra021 Intemational Business Miaterm (Ch 1-8) Flashcards | Quzlet Economies of scale as production increases, average production costs fall (manufacturing savings) first-mover advantage being the first to enter into a market taxes on imports, Tariffs (makes domestic goods more attractive) D Specific tariff (each unit) 2types of tariffs 2) Ad valorem tariff (overall value) payment for domestic production (to lower the cost of Subsidies production) limit placed on the number of goods that can be imported import quotas " J - Raises production costs and prices of foreign goods charge a lower tariff if below the quota and a higher tariff i Tariff rate quota above the quota Voluntary export restraint government limits the number of exports (opposite of import quotas) ~ Used to protect against paying tariffs ~ leads to a rise in prices and profits Quota rent extra profits are earned as a result of artificial limits placed on exports Local content requirements requires a portion of production to be completed in the domestic country Administrative policies = laws that make it difficult for imports to enter the country - Goal is to keep out competition Antidumping policy laws that prohibit dumping countervailing duties additional tariffs that can last up to 5 years and can put a company out of business htpssquile.comv99139047/ntemationa-business-midienm-ch-t-Slash-cards!anra021 Intemational Business Miaterm (Ch 1-8) Flashcards | Quzlet Helms - Burton Act of 1996 allow Americans to sue businesses that use land that was confiscated by the Cuban government Amato Act of 1996 allow Americans to sve businesses that use land that was confiscated by Libya and Iran Foreign Direct Investment (FD!) measure of all the physical assets and signif a business in a foreign country icant ownership of FDI occurs in 2 ways 1) buying an existing foreign business 2) greenfield investments = establishing operations in another country 2 types of FDI horizontal FOL 2) vertical FOI 5 reasons for horizontal/vertical FDI 1) reduced Transportation costs 2) eliminate Market imperfections 3) capitalize on Strategic behavior 4) capitalize on the Product life cycle 5) Take advantage of Location-specific advantages market imperfections factors that prevent the market from operating perfectly (at equilibrium) - technology can help oligopoly market that's served by a few businesses multipoint competition competition follows each other to different markets Location-specific advantages advantages that arise from the factor endowments that exist ina country FDI inflow flow of FDI (products) into a country gross fixed capital formation measure of all facilities, offices, retail stores, elc. as a result of FDI inflow htpssquile.comv99139047/ntemationa-business-midienm-ch-t-Slash-cards! 18anra021 Intemational Business Miaterm (Ch 1-8) Flashcards | Quizlet values | beliets norms | way they benave Internalization Theory | theory that FDI was caused by market imperfections htpssquile.comv99139047/ntemationa-business-midienm-ch-t-Slash-cards!