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17 Cards in this Set
- Front
- Back
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Greenfield Investment
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Establishing a new operation in a foreign culture.
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Flow of FDI
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The amount of FDI undertaken over a given time period (normally a year).
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Stock of FDI
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The total accumulated value of foreign-owned assets at a given time.
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Outflows of FDI
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The flow of FDI out of a country.
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Inflows of FDI
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The flow of FDI into a country.
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Gross Fixed Capital Formation
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Summarizes the total amount of capital invested in factories, stores, office buildings, and the like.
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Eclectic Paradigm
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Argument that combining location-specific assets or resource endowments and the firm's own unique assets often requires FDI; it requires the firm to establish production facilities where those foreign assets or resource endowments are located.
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Exporting
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Sale of products produced in one country to residents of another country.
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Licensing
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Occurs when a firm (the licensor) licenses the right to produce its product, its production processes, or its brand name or trademark to another firm (the licensee); in return for giving the licensee these rights, the licensor collects a royalty fee on every unit the licensee sells.
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Internalization Theory
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The argument that firms prefers FDI over licensing to retain control over know-how manufacturing, marketing, and strategy or because some firm capabilities are not amendable to licensing; also known as the market imperfections approach.
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Oligopoly
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An industry composed of a limited number of large firms.
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Multipoint Competition
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Arises when two or more enterprises encounter each other in different regional markets, national markets, or industries.
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Location-Specific Advantages
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Advantages that arise from utilizing resource endowments or assets that are tied to a particular foreign location and that a firm finds valuable to combine with its own unique assets (such as the firm's technological, marketing, or management capabilities.
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Externities
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Knowledge spillovers.
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Balance-of-Payments Accounts
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National accounts that track both payments to and receipts from other countries.
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Current Account
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In the balance of payments, records transactions involving the export and import of goods and services.
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Offshore Production
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FDI undertaken to serve the home market.
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