Chapter 4- Manufacturing

Countries like the US and the UK that consistently invested abroad for a long time, even in the face of economic shifts.

Countries like France, Germany, and Japan that had periods of strong foreign investment followed by periods of decline.

Countries like Italy, Spain, and emerging Asian economies, who started investing abroad more recently but have seen rapid growth in their investments.

A model that explains how a country's international investment position changes over time, based on its economic development and GNP per capita.

The initial stage of economic development where a country doesn't have significant inward or outward foreign direct investment (FDI).

The stage where a country starts attracting inward FDI as its domestic market grows and production costs become more competitive.

The stage where a country's inward FDI per capita begins to decline, as domestic industries mature and become more competitive.

The stage where a country becomes a net outward investor, with its investments abroad exceeding those of foreign-owned firms within its own country.

A model of international competition where a country's investment patterns evolve over time, from initially being a recipient of foreign investment to eventually becoming a net outward investor with its own firms investing abroad.

A decline in a country's inward investment per capita, often due to local firms developing their competitive advantages and attracting investment.

A country becomes a net outward investor, with its investment flows abroad exceeding those of foreign-owned firms within its borders.

A framework that highlights four key attributes of a country's home economy that influence its firms' international competitive advantage.

The availability and quality of natural resources and infrastructure within a country.

The size, sophistication, and demands of domestic customers, which can drive innovation and product development.

The presence of clusters of related firms and industries that create synergies and knowledge sharing opportunities.

The competitive intensity of a nation's industries, which forces firms to improve efficiency and innovation.

The idea that a country's business culture and how its companies behave internationally can be partly explained by its national cultural values. For example, countries with long colonial histories may have a stronger outward-looking business orientation.

The tendency for companies in a country to focus on international business opportunities and expand their operations abroad. This can be influenced by factors like colonial history, trade traditions, and a history of emigration.

Countries like Britain and the Netherlands, with historical colonial and mercantile traditions, developed strong outward-looking business cultures, characterized by international trade and investment.

Countries like Switzerland and Sweden, lacking colonial histories, but with strong international trade traditions and exposure to foreign cultures, also developed outward-looking business cultures. They are known for multilingual abilities and diverse international engagements.

The US, a nation of immigrants, received many migrants from outward-looking countries like Britain, the Netherlands, Switzerland, and Sweden, contributing to its own outward-looking business culture.

Cultural influences on business are often subtle and difficult to measure directly, making it challenging to analyze how national cultures affect multinational companies.

Differences in levels of outward investment across countries might reflect different cultural attitudes towards international business. Some countries might be more naturally inclined towards outward investment than others.

The study of the influence of culture on multinational companies remains challenging, but understanding cultural differences is crucial for successful global business strategies.

National firms can perform differently despite sharing a common home country due to varying factors like strategy, management, and performance.

Firms can maintain prominence in an industry even after their home country loses its initial advantage.

The success of multinational giants like Shell, Ford, and Sony can be attributed to specific experiences that set them apart from less successful competitors in the same industry.

The growth of global giants often relies on home country resources but their individual stories show diversity in management, strategy, and performance.

Strong country similarities exist in business strategies of firms from the same nation, but firms within that nationality don't equally benefit from home country resources.

First-mover advantages and established positions in a market can significantly contribute to a firm's long-term success.

Companies may continue to thrive even after their home country loses its initial advantage.

The development of a unique management or production system can be a key factor in a firm's success.

Countries with a culture focused inward, prioritizing their own unique values and traditions, often maintaining a cautious approach to foreign involvement. They might engage with foreign technologies but keep a distance from foreign people and corporations.

A preference for individualistic values, equality, and tolerance for uncertainty often correlates with higher levels of foreign direct investment (FDI), particularly in riskier sectors like mining or petroleum.

The Treaty of Versailles, imposed on Germany after World War I, heavily penalized the country through territorial losses, military limitations, and hefty reparation payments, significantly impacting its ability to invest abroad.

Periods of significant economic disruption, such as major wars, can significantly affect foreign direct investment (FDI) by countries involved. For example, Germany and Japan experienced limited FDI following World War I and World War II respectively, due to the seizure of their foreign assets and the economic repercussions.

Cultural factors, particularly a focus on individualism, equality, and risk tolerance, have been historically associated with higher levels of foreign direct investment (FDI). These cultural traits encourage entrepreneurship and a willingness to engage in international business ventures.

Countries might be categorized as either persistent investors (consistent investments), erratic investors (fluctuating investments), or latecomer investors (recent rapid increase). This classification helps understand the evolutionary path of FDI and the factors influencing a country's investment strategy.