Global Business final

float

when a currency’s value increases or decreases based on supply and demand

nixon monetary policy change

1971- Nixon ended the free convertibility of the U.S. dollar into gold and instituted price and wage freezes, among other economic measures.

inflation

the rate of increase in prices over a given period of time. decreases value of currency over time.

deflation

decrease in the general price level of goods and services. increases value of currency over time

pegged rates

Fixed exchange rates

licensing

defined as the granting of permission by the licenser to the licensee to use intellectual property rights, such as trademarks, patents, brand names, or technology, under defined conditions.

franchising

agreement, the multinational firm grants rights on its intangible property, like technology or a brand name, to a foreign company for a specified period of time and receives a royalty in return.

exporting

the sale of products and services in foreign countries that are sourced from the home country

acquisition

transaction in which a firm gains control of another firm’s assets or stock, typically by purchasing its stock, exchanging the stock for its own, or, in the case of a private firm, paying the owners a purchase price

greenfield venture

An international entry mode involving the establishment of a new, wholly owned subsidiary.

partnerships

involves a contractual agreement between two or more enterprises stipulating that the involved parties will cooperate in a certain way for a certain time to achieve a common purpose

safety stock

this inventory helps ensure that the company won’t run out of products if there’s a delay or unexpected crisis in a distant manufacturing region and avoid a stock out

stock out

there is no more stock of the company’s product.

supply chain disruption plans

the recent global pandemic, climate change, evolving regulations, international tax agreements, cyber threats, and geopolitical conflicts.

research

to identify new knowledge and ideas

development

turning ideas into tangible products

rnd purpose

done to develop new products, services, or procedures to grow and expand

basic research

_____ _____ advances knowledge with no commercial direct benefit and applied research commercializes its findings

rnd labs

funded research and resulted in many inventions/ innovations

asia

where do most countries have their rnd

governmental rnd

funds can be given from grants to universities/research centers or offering contracts ato corporations for performing research in a specific area, tax incentives, and high innovation targets

currency

a form of money in general circulation in a country

foreign exchange

money denominated in the currency of another country

quoting currency

indicates how much of one currency it takes to buy the other with base and quoted currency

offshore financial center

a country or territory where there are few rules governing the financial sector as a whole and lower overall taxes

incorporate or locate financing subsidiaries

what can businesses do in an offshore financial center

offshore financial center criticism

entities can hide wealth in ofcs and also hide shady business with terrorist and drug lords

United states trade representative

US governments office that monitors intellectual property rights around the world and fights IP theft

US trade rep job

evaluates countries and rates them according to how countries enforce IP rights

Reduce IP theft

what can countries do to be removed from the priority watch list

Special 301 report

annual review of the global state of IPR protection and enforcement issued by USTR

Algeria, Argentina, Chile, China, india, indonesia, russia, saudi arabia, ukraine, and venezuela

Countries on the 2022 priority watch list

exit strategies

the way a venture capitalist can liquidate an investment

IPOs, lists of possible strategic acquirers, access to global markets for new investors or firms to invest in

some exit strategies for investors

currency conversion, hedging, arbitrage, speculation

purpose of foreign exhange market

currency hedging

technique of protecting against the potential losses that result from adverse changes in exchange rates

currency arbitrage

simultaneous and instantaneous purchase and sale of a currency for a profit

currency speculation

refers to the practice of buying and selling a currency with the expectation that the value will change and result in a profit

International bank for reconstruction and development

generates funds for its development work through the international capital markets

International development association

provides interest free loans to countries with sovereign guarantees

international finance corporation

provides loans, equity, risk managemnt tools, and structured finance

multilateral investment gurantee agency

focuses on improving the foreign direct investment of developing countries

International Centre for Settlement of Investment Disputes

provides a means for dispute resolution between governments and private investors with the end goal of enhancing the flow of capital.

the IBRD; the international development association IDA; the International Finance Corporation (IFC), the Multilateral Investment Guarantee Agency (MIGA), International Centre for Settlement of Investment Disputes (ICSID)

five groups that make up the world bank group

primary markets

where new securities are issued and funds are received directly

secondary markets

includes stock exchanges, bond markets, and futures and options markets

securities

includes wide range of financial instruments including equity securities and debt securities

liquidity

one fundamental purpose of the capital market its

international equity markets

consists of all the stock traded outside the issuing company’s home country

bond market

loan from the holder to the issuer, includes all bonds sold by companies, governments, or entities outside their home country

Eurocurrency markets

originated when communist governments are concerned that deposits in US banks might be confiscated or blocked

euro currency

currency or deposit outside its. country of issue

indirect finance

involves a financial intermediary

Belize dollar, the Hong Kong dollar, and the United Arab Emirates dirham

what currencies have been pegged

grey markets exist

because of price discrepancies between different markets

income differentials

packaged good companies may price products higher in one country compared to another due to _____ ______

offshoring

involves setting up operations in a low cost country to hire local workers at lower labor costs

outsourcing

companies delegate an entire process to the outsource vendor who takes control of operations

local production

a company can source materials and manufacture in another country

export, local assembly, local production

how managers can get manufacturing cheaper

planning, sourcing and procurement, conversion, logistics, collabs with channel partners, supply and demand management

components to supply chain management

channel partners

suppliers, intermediaires, third party service providers, and customers