Untitled Flashcards Set

Regional economic integration

Reducing barriers within one region.

Global economic integration

Efforts to reduce trade and investment barriers around the globe, making it easier to trade and invest.

GATT

General Agreement on Tariffs and Trade; multilateral agreements governing international trade of goods.

WTO

World Trade Organization; organization underpinning the multilateral trading system since 2005.

GATS

General Agreement on Trade in Services; WTO agreement governing international trade of services.

TRIPS

Trade-Related Aspects of Intellectual Property Rights; WTO agreement governing intellectual property rights.

NAFTA

North American Free Trade Agreement; economic integration between the US, Canada, and Mexico.

Customs Union

Imposes common external policies on nonparticipating countries, going beyond a free trade area.

Political Union

Integration of political and economic affairs of a region.

Common Market

Combines everything a customs union has, permitting the free movement of goods and people.

Economic Union

Members coordinate and harmonize economic policies, blending their economies into a single economic entity.

Free Trade Area (FTA)

A group of countries that removes trade barriers among themselves.

SMEs

Small to medium enterprises, making up 95% of all businesses and accounting for 80% of new jobs.

VRIO

A framework to evaluate resources based on value, rarity, inimitability, and organization.

Country of origin effect

Positive or negative perception of firms and products from a certain country.

Liability of foreignness

Inherent disadvantage foreign firms experience in host countries due to their nonnative status.

Agglomeration

Location-specific advantages that arise from the clustering of economic activities.

Cultural distance

The difference between two cultures along identifiable dimensions such as individualism.

Institutional distance

Extent of similarity or dissimilarity between the regulations, norms, and cognitive institutions of two countries.

First-mover advantages

Benefits that accrue to firms that enter the market first.

Late mover advantages

Benefits that accrue to firms that enter the market later.

Nonequity mode

Entering foreign markets through exports and contractual agreements with smaller commitments.

Equity mode

Entering foreign markets through joint ventures and wholly owned subsidiaries with larger commitments.

Microcredit

A lending method providing small loans for personal or business use.

Microinsurance

Insurance products aimed at low-income populations to protect against specific risks.

Types of MED social collateral

Social networks, trust and relationships, culture and social norms, access to resources.

Sustainability in MED

Operational sustainability measures whether a MED program can cover costs through revenues.

Types of risk in global expansion

Market, political, social, reputational, and property risks.

Foreign currency exchange

The price of one currency in terms of another and its mechanisms.

Big Mac index

Economic tool used to measure purchasing power parity between currencies using Big Mac prices.

Capital flight

Large-scale movement of financial assets and capital out of a country due to instability.

Bandwagon effect

The effect of investors moving in the same direction at the same time.