Study Plan: The Global Business Environment

absolute advantage

the ability of an entity to produce a good or service more efficiently than another

acquisition

one business buys another

balance of payments

the difference between the total flow of money coming into a country and the total flow of money going out of a country during a period of time

balance of trade

the difference between the value of a country’s exports and the value of its imports during a specific time

buy-national regulations

government rules that give special privileges to domestic manufacturers and retailers

common external tariff

the agreed upon tax imposed on imports by members of a customs union

common markets

an agreement between nations that allows for free trade and free movement of resources such as capital and labor between member nations

comparative advantage

the ability of an entity to produce a good or service at a lower opportunity cost than another

communication

the ability to clearly and effectively exchange information with others

copyright

artistic

countertrade

a system of exchange in which goods and services are used as payment rather than money.

culture

the influence of religious

customs union

type of trade agreement where the countries within the union agree to allow free trade on certain products within the union and impose a tariff on the import of those products from outside the union

economic union

an agreement between nations that eliminate internal barriers

embargo

a complete ban against importing or exporting a product

exchange controls

laws that require a company earning foreign currency from its exports to sell the foreign exchange to a control agency

exporting

taking goods that were produced within a company’s home country and shipping them to another country

exports

goods and services made in one country and sold to others

foreign direct investment

an investment in the form of a controlling ownership in a business enterprise in one country by an entity based in another country

franchise agreement

owner of a business allows another party to acquire the knowledge

franchisee

purchaser in a franchise agreement

franchisor

owner of a business and its associated knowledge

global business

activity that happens when goods

globalization

integration of the world’s economies that involves the exchange of culture

greenfield venture

the company enters a foreign market by establishing a new business operation in another country

import quota

a government policy limiting the quantity of a certain good that can be imported

importing

the process by which a good is brought into a jurisdiction

imports

goods and services that are bought from other countries

inflow

money that comes into a country

intellectual property

ownership of intangible assets

International Monetary Fund

provides short-term loans to member nations that cannot meet their budgetary expenses

joint venture

establishes a new business that is jointly owned by two or more otherwise independent businesses

licensee

the party buying rights to use some else’s intellectual property

licensing agreement

owner of intellectual property agrees to allow another party to use the property for a fee

licensor

owner of the intellectual property in a licensing agreement

merger

two businesses combining to form a new entity

nationalism

the sense of national consciousness that boosts the culture and interests of one country over those of all other countries

natural barriers to trade

physical or cultural conditions that prevent free trade

offshoring

relocation of a business process to another country

outsourcing

an agreement to contract a business process to be completed by an external company

outflow

money that goes out of a country

patent

technical inventions

regional trade agreements

trade agreements between two or more partner nations

strategic alliance

an agreement of two or more corporations

tariff

a tax imposed by the government on imported goods

trade agreements

agreements between nations that regulate how trade will flow between countries

trade deficit

an unfavorable trade balance where a country imports more than it exports

trade secret

information that has either actual or potential independent economic value by virtue of not being generally known and cannot be legitimately obtained by others

trade surplus

a favorable trade balance where a country exports more than it imports

trademark

a word

World Bank

financial institution that provides low-interest loans and grants to developing countries to fund projects focused on education

World Trade Organization

international organization dedicated to reducing trade barriers and opening markets; also provides a forum to resolve trade disputes between nations