Introduction to International Business

These flashcards cover key terms and concepts related to international business, enhancing understanding of the subject for exam preparation.

International Business

Includes all value-adding activities—sourcing, manufacturing, and marketing—performed on an international scale.

Key Concepts in International Trade

Include exporting, importing, international investment, foreign direct investment, and globalization of markets.

Exporting

Sale of products or services to customers abroad from a base in the home country or a third country.

Importing

Getting products or services from suppliers abroad to be used at home or in a third country.

Foreign Direct Investment

The transfer of assets to another country, or the acquisition of assets in that country such as capital, labor, land, and equipment.

Cross-Cultural Risk

Risks arising from cultural differences including language, lifestyles, and ethical practices.

Country Risk

Risks related to a harmful political system, laws unfavorable to foreign firms, and economic mismanagement.

Currency Risk

The risk of unfavorable exchange rate fluctuations affecting the value of a firm's assets and liabilities.

Commercial Risk

Risks involved in operations, such as weak partners, operational issues, or poor execution of business strategies.

Market Globalization

The ongoing process of economic integration and growing interdependency of countries worldwide.

Regional Integration

When nations form an alliance aimed at reducing barriers to trade and increasing economic interdependence.

Economic Bloc

A geographic area where countries agree to pursue economic integration by reducing tariffs and trade barriers.

NAFTA

North American Free Trade Agreement, eliminating tariffs and establishing trade and investment rules between Canada, Mexico, and the U.S.

MERCOSUR

A leading economic bloc in South America providing free movement of products and common external tariffs.

Societal Consequences of Globalization

Include loss of national sovereignty, job offshoring, effects on the poor and natural environment, and impact on national culture.

Born Global Firms

New, entrepreneurial SMEs that engage in substantial international business early after their founding.