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23 Cards in this Set

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  • Back
foreign direct investment
direct investment in business operations in a foreign country
multinational enterprise
a firm that owns business operations in more than one country
green-field investment
establishing a new operation in a foreign country
foreign portfolio investment
investments by individuals, firms, or public bodies in foreign financial instrument
flow of FDI
the amount of FDI investment undertaken over a given time period
stock of FDI
the total accumulated value of foreign-owned assets at a given time
outflows of FDI
flow of foreign direct investment out of a country
inflows of FDI
flow of FDI into a country
gross fixed capital formation
summarizes the total amount of capital invested in factories, stores, office buildings, and the like
eclectic paradigm
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
flow of FDI
the amount of FDI investment undertaken over a given time period
exporting
sale of products produced in one country to residents of another country
licensing
occurs when a firm licenses the right to produce its product, use its production processes, or use its brand name or trademark to another firm. In return for giving the licensee these rights, the licensor colleccts a royalty fee on every unit the licensee sells
internalization theory
marketing imperfection approach to FDI, seeks to explain why firms often prefer FDI
eclectic paradigm
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
oligopoly
an industry composed of a limited number of large firms
multipoint competition
arises when two or more enterprises encounter each other in different regional markets, national markets, or industries
location specific advantages
advantages that arise from using 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
externalities
knowledge spillovers
balance of payments accounts
national accounts that track both payments to and receipts from foreigners
current account
in the balance of payments, records transactions involving the export or import of goods and services
Organization for Economic Cooperation and Development
a Paris-based intergovernmental organization of "wealthy" nations whose purpose is to provide its 29 member states with a forum in which governments can compare their experiences, discuss the problems they share, and seek solutions that can then be applied within their own national contexts
Multilateral Agreement on Investment (MAI)
an agreement that would make it illegal for signatory states to discriminate against foreign investors; would have liberalized rules governing FDI beteen OECD states