4.4: Keywords

horizontal transfer

transfer of knowledge across the same industry

repatriated profit

return of the profit made by an MNC to the country where the MNC is based

reverse engineering

method of analysing a product's design by taking it apart

transfer pricing

attempt to avoid relatively high tax rates

vertical transfer

transfer of knowledge, backwards or forwards, along the chain of production in the same industry

child labour

illegal employment of young children by a business

code of conduct

set of rules outlining the proper practices of an organisation

embezzlement

theft of money or other belongings from a business by an employee who has control over such resources

green credentials

commitment to practices that do not damage the environment

institutional framework

the system of formal laws, regulations and procedures, and informal conventions customs and norms that shape activity and behaviour

boycotting

withdrawing from commercial or social relations as a form of protest

competition policy

overnment policy that exists to promote competition and ensure that firms don't abuse their market power, do not attempt to fix prices or use pricing strategies to drive out competition, and do not work together illegally against other producers or the consumer

direct action

use of demonstrations, protests, strikes or even sabotage to achieve a political or social goal

multiplier effect

an increase in spending generates a much greater level of total spending in the economy

parent company

company that has control over another company

payday lending

short-term lending where the loan may or may not be repaid when the borrower gets paid from work

self-policing

businesses monitor their own activities without reference to an external authority

tax avoidance

using legal methods ot reduce the amount of tax that a company pays

tax evasion

using illegal means to avoid paying taxes that are owed

tax haven

country where taxes are relatively low

tax ruling

an advance arrangement between the tax authorities and a taxpayer, such as an MNC, to clarify the tax implications of a transaction