3. National differences in economic development

gross domestic product (GDP)

Measures the total monetary or market value of all the finished goods and services produced within a country’s borders in a specific time period.

purchasing power parity (PPP)

Adjustment in GDP per capita to reflect differences in the cost of living.

Human Development Index (HDI)

Attempt by the United Nations to assess the impact of a number of factors on the quality of human life in a country.

innovation

Development of new products, processes, organizations, management practices, and strategies.

entrepreneurs

Those who first commercialize innovations

deregulation

Removal of government restrictions concerning the conduct of a business.

first-mover advantages

Advantages accruing to the first to enter a market

late-mover disadvantages

Handicaps experienced by being a late entrant in a market.

political risk

The likelihood that political forces will cause drasticchanges in a country’s business environment that will adversely affect the profit and other goals of a particular business enterprise.

economic risk

The likelihood that events, including economic mismanagement, will cause drastic changes in a country’s business environment that adversely affect the profit and other goals of a particular business enterprise.

legal risk

The likelihood that a trading partner will opportunistically break a contract or expropriate intellectual property rights.