WGU C211 - Global Economics for Managers
1. Views on Globalization New, Evolutionary, and Pendulum
2. "New" view on globaliza-
tion
3. "Evolutionary" view on
globalization
4. "Pendulum" view on glob-
alization
A force sweeping through the world in recent
times.
A long-run historical evolu...
WGU C211 - Global Economics for Managers 1. Views on Globalization New, Evolutionary, and Pendulum 2. "New" view on globaliza - tion 3. "Evolutionary" view on globalization 4. "Pendulum" view on glob - alization A force sweeping through the world in recent times. A long-run historical evolution since the dawn of human history One that swings from one extreme to another from time to time 5. Foreign Direct Investment Direct investment in, control, and management of value -added activities in other countries 6. Political views on FDI Radical View, Free Market View, Pragmatic Nationalism 7. Benefits to a country re - ceiving FDI 8. Costs to a country receiv - ing FDI 9. How do resources and capabilities influence the competitive dynamics of a business? Capital Inflow, Technology Spillover, Advanced Management Know -How, Job creation Loss of Sovereignty, Adverse effects on com- petition, Capital outflow. Resource similarity and market commonality can yield a powerful framework for competitor analysis. 10. Resource similarity The extent to which a given competitor pos- sesses strategic endowment comparable, in terms of both type and amount, to those of the focal firm. 11. How does resource similar - ity impact competitive dy - namics? 12. Classical theories of inter - national trade Firms with a high degree are likely to have similar competitive actions. (Starbuck's instant coffee & McDonald's iced coffee) Mercantilism, Absolute advantage, and Com - parative advantage WGU C211 - Global Economics for Managers 13. Modern theory view Dynamic 14. Classical theory view Static 15. Absolute advantage The economic advantage one nation enjoys that is superior to other nations 16. Comparative advantage The advantage one economic activity nation enjoys in comparison with other nations (rela- tive, not absolute) 17. Mercantilism A theory that suggests that the wealth of the world is fixed and that a nation that exports more and imports less will be richer. 18. Features of the product life cycle? New, Maturing, and Standardized 19. Strategic trade Intervention by governments in certain indus - tries can enhance their odds for international success. 20. How are supply and de - mand related to the ex - change rate of a country? The price of a commodity, a country's currency, is fundamentally determined by this. Strong demand leads to price hikes; oversupply re - sults in price drops. 21. Which theory came first? Mercantilism (although both are of the idea that governments should actively protect do - mestic industries from imports and vigorously promote exports) 22. If a company seeks to lim - it foreign exchange rate ex- posure in the forward direc - tion, what is the most effec - tive way to do this? 23. Transaction risk Forward transactions, an act know as currency hedging. The exchange rate risk associated with the time delay between entering into a contract and settling it. 24. Hedging A transaction, such as forward transactions, that protects traders and investors from expo - sure to the fluctuations of the spot rate. 25. Currency hedging A way to protect traders and investors from being exposed to the fluctuations of the spot rate 26. Strategic hedging A means of spreading out activities in different currency zones in order to offset the currency losses in certain regions through gains in other regions (currency diversification) 27. First mover advantages Proprietary, technological leadership, pre-emption of scarce resources, establish - ment of entry barriers to late entrants, avoid - ance of clash with dominant firms at home, relationships with key stakeholders, (such as governments.) 28. Late mover advantages Opportunity to free ride on first-mover invest - ments, Resolution of technological and market uncertainty, First mover's difficulty to adapt to market changes.) 29. Foreign market entries Non-equity and equity types 30. Non-equity Reflects relatively smaller commitments to overseas markets. Determines firms MNE sta- tus. 31. Equity indicative of relatively larger, harder -to-reverse commitments. Determines firms MNE status. 32.
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