Chapter 1 - Introduction: What Is International Business Flashcards
International Business
The performance of trade and investment activities by firms across national borders
Globalisation of Markets
The ongoing economic integration and growing interdependency of countries worldwide
International Trade
The exchange of products and services across national borders, typically through exporting and importing
Exporting
The sale of products to customers located abroad, from a base in the home country or a third country
Importing
The procurement of products or services from suppliers located abroad for consumption in the home country or a third country
Global Sourcing
The procurement of products or services from suppliers located abroad for consumption in the home country or abroad
International Investment
The transfer of assets to another country or the acquisition of assets in that country
International Portfolio Investment
Passive ownership of foreign securities such as shares and bonds for the purpose of generating financial returns
Foreign Direct Investment FDI
An internationalisation strategy in which the firm establishes a physical presence abroad through the acquisition of productive assets such as capital, technology, labour, land, plant and equipment.
Cross-Cultural Risk
A situation or event where a cultural misunderstanding outs some human value at stake
Country Risk
Potentially adverse effects on a company operations and profitability caused by developments in the political, legal and economic environment in a foreign country
Currency Risk
The risk of adverse fluctuations in exchange rates
Commercial Risk
A firms potential loss or failure due to poorly developed or executed business strategies, tactics or procedures
Multinational Enterprise MNE
A large company with substantial resources that performs various business activities through a network of subsidiaries and affiliates located in multiple countries
Small and Medium Sized Enterprise SME
A small or medium sized company
