International Business Quiz 10

institutional void

institutional conditions if a country lacking market-supporting infrastructure

location-specific advantage

the benefits a firm reaps from the features specific to a place

first-mover advantage

benefits that accrue to firms that enter the market first and that late entrants do not enjoy

scale of entry

the amount of resources committed to entering a foreign market

non-equity mode

a mode of entry (exports and contractual agreements) that reflects relatively smaller commitments to overseas markets

equity mode

a mode of entry (joint ventures and wholly owned subsidiaries) that indicates relatively larger commitments to overseas markets

entry mode

a form of operation that a firm employs to enter foreign markets

turnkey project

a project in which clients pay contractors to design and construct new facilities and train personnel

build-operate-transfer agreement

a non-equity entry mode used to build a longer-term presence by first constructing and then operating a facility for a period of time before transferring operations to a domestic agency or firm

research-and-development contract

an outsourcing agreement in R&D between firms

co-marketing

efforts among a number of firms to jointly market their products and services

joint venture

a new corporate entity created and jointly owned by two or more patent companies

wholly owned subsidiary

a subsidiary located in a foreign country that is entirely owned by the patent multinational

greenfield operation

building factories and offices from scratch (on a proverbial piece of “green field” formerly used for agricultural purposes)

country-of-origin effect

the positive or negative perception of firms and products from a certain country

linkage, leverage, and learning advantage

a firm’s quest of linkage advantages and learning advantages, which are typically associated with multinationals from emerging economies

reciprocity

an informal agreement based on mutual exchange of gratifications