mid term international business

ethical behavior

1. personal ethics

2. societal culture

3. organizational culture

4. leadership

5. decision making process

6. unrealistic performance goals

hofstedes dimensions

1. power distance

2. masculinity vs femininity

3. indulgence vs restraint

4. individuality vs collectivistic

5. uncertainty avoidance

6. long term vs short term

LOF

liability of foreignness

disadvantage of being foreign

recognized by heymer but actually created by zaheer

LON

liability of nativeness

when you are so embedded where you are you cannot adjust to change

porters diamond ( determinants of national competitive advantage )

1. firm strategy, structure, and rivalry

2. factor endowments

3. related and supporting industries

4. demand conditions

people in the middle

transaction costs

no trade barriers

trade barriers

bands, tariffs, and quotas

product life cycle

1. make a product

2. does good and demand goes up

3. over time demand falls

4. must make a new product and release it at the right time to continue demand

( think apple with the iphone)

political regimes

1. democracy

2. autocracy

FDI

inflow and outflow

they must be equal

LCR

local content requirement

utilized to increase employment by increasing manufacturing and improve the brand

trade balance

deficit: import > export inflow

surplus: export > import outflow

regional trade agreements

USMCA: us, mexico, canada

EU

Mercosur: bolivia, brazil, paraguay, uraguy

levels of economic integration

• free trade

• customs union

• common market

• economic union

• political union

(EU is between economic and political)

free trade theories

comparative advantage ( david ricciardo )

absolute advantage ( adam smith )

economies of scale

• find a new market

• new demand

• increase production

• cost per unit goes down price per product goes up

first mover advantage

be the first to enter a new market with a new product and make profit

determinants of culture, norms, and value systems

• education

• language

• religion

• social structure

• political philosophy

• economic philosophy

determinants of countries development levels

• GDP

• GDP per capital and by population

• PPP

• happiness and life satisfaction

• human development index

foreign exchange market

where currency is exchanged

NYC, london, Zuri, Singapore, Tokyo

London largest

forms of currency convertibility

market: supply and demand

fixed: government set rate

pegged: adjusting against just one another currency

legal systems

• civil

• common

main mission of UN

peace

types of arbitrage

• economic

• administrative

• geological

• labor

protective trade

countries protect trade with bands tarrifs and quotas

efficient market

having all the information on a market

balance trade

export = import

Dollarization

countries starts using the dollar in some part of the currency more than their own currency not abandoning their currency 100%

task of IMF

provides financial stability to nations with conditions usually the last option because it’s corrupt

USMCA & NAFTA two main differences

USMCA is a LCR

fair wages