52 Questions
What are the two main drivers of globalization mentioned in the text?
Liberalization and technological revolution
How is globalization described in the text?
A process of growing integration and interdependence of nations
What are the two important growth factors for globalization mentioned in the text?
Liberalization of international exchanges and innovation of major technologies
What is the gravity model of international predicting, according to the text?
Bilateral trade flows between two units
What was the aim of liberalization initiated after WWII?
To seek world peace through wealth sharing and stability
What was the purpose of the Bretton Woods agreement negotiated in 1944?
To regulate and promote international trade by reducing foreign exchange risk
What led to the creation of international organizations such as the IMF, World Bank, and GATT (later WTO)?
The Bretton Woods agreements to provide currency stabilization and global monetary support
What has led to economic integration and reduced trade costs among countries?
Lower transaction costs and tariffs facilitated by trade liberalization and technological advances
What contributed to the considerable decline in maritime transport costs?
Technological improvements and containerization
How have telecommunications costs fallen significantly?
With fiber optic cables and the mass diffusion of cell phones
What has been a nearly universal fact due to the reduction in tariffs?
More trade of goods and services and correlating with more financial movements across borders
What does the Chinn-Ito index measure?
A country's degree of capital account openness, indicating financial integration and its correlation with trade
What does Hofstede's Theory of Cultural Dimensions identify?
Six dimensions to explain cultural differences
What is the focus of Long-Term Orientation according to Hofstede's Theory?
Savings, persistence, and endurance
What does Uncertainty Avoidance measure?
Society's tolerance for ambiguity and risk
What does Indulgence vs. Restraint reflect?
Society's approach to the gratification of natural human desires
What does the technological divide refer to?
Differences in access based on geographical and socioeconomic factors
Which historical trade route facilitated economic, cultural, political, and religious interactions between the East and West?
The Silk Road
What are three false ideas about globalization?
New, irreversible, and complete
What period is referred to as the 'first golden age of globalization'?
1870 to 1913
What brought both stability and limitations to money supply during the 'first golden age of globalization'?
The classical gold standard
What contributed to the first globalization?
Improvements in transport, communications, and reduction in tariffs
What resulted in access to cheap and abundant raw materials for European powers from 1870 to 1914?
Domination of Africa
What has led to increased wealth, but has not been equally distributed, contributing to inequality?
Globalization
What theorem demonstrates how changes in the prices of goods can generate inequality in trade?
The Stolper-Samuelson theorem
What can lead to protectionism and hinder globalization?
Political tensions and ideologies
According to the WTO, what has been on the rise in recent years?
Protectionism
What brought relative peace and increased trade among great powers during the 'first golden age of globalization'?
The 'Pax Britannica'
What has evolved over time, with higher trade volumes and changes in the composition of traded goods?
Globalization
What has slowed in recent years, according to the WTO?
Trade integration
What is the main purpose of the liberalization process initiated after WWII with the Bretton Woods agreements?
To aim for world peace through wealth sharing
Which cultural dimension measures a culture's acceptance of hierarchical authority?
Power distance
What does individualism vs. collectivism measure?
The extent to which people feel independent or interdependent as members of larger groups
Which theory provides a framework for understanding cultural differences, including dimensions like power distance, individualism vs. collectivism, and masculinity vs. femininity?
Hofstede's Theory of Cultural Dimensions
What is the main role of cross-cultural knowledge in international business?
Avoiding misunderstandings, building trust, enhancing negotiations, and managing multinational teams
Which dimension of Hofstede's Theory of Cultural Dimensions reflects the distribution of emotional roles between genders?
Masculinity vs. femininity
What does the dimension of masculinity vs. femininity in Hofstede's Theory of Cultural Dimensions value?
Assertiveness and achievement
What does power distance measure in a culture?
Acceptance of hierarchical authority
What is a crucial aspect of cross-cultural knowledge in international business?
Enhancing negotiations
What is the extent of individual rights emphasized in individualistic cultures?
High
What cultural dimension reflects the extent to which people feel independent or interdependent as members of larger groups?
Individualism vs. collectivism
What is the main focus of Hofstede's Theory of Cultural Dimensions?
Understanding cultural differences
Which of the following is a common challenge in cross-cultural teams?
Cultural incompatibility
Choose the INCORRECT statement:
The latest bout of globalization was characterized by a slow diffusion process.
What is the Industrial Production Index (IPI) used for?
Capturing market conditions in the manufacturing sector
The HALE measure we discussed in class measures…
the average equivalent number of years of full health that a person could expect to live
Choose the INCORRECT statement:
The Inca empire maintained a short but intensively used road network used for trade
Which of the following are part of the “5 Ps” of sustainable development?
Planet, prosperity, people
What are the two main drivers for the latest globalization?
Large decrease in transportation costs and changes in global laws
Which one of these is the most correct?
Someone living with less than 2 dollars a day experiences extreme poverty
What does the human development index include?
Life expectancy, education, and per capita income
What was the aim of liberalization initiated after WWII?
To facilitate international trade and economic growth
Study Notes
Global Business and Cross-Cultural Work
- Capital account is based on dummy variables representing restrictions on cross-border financial transactions reported in the IMF's Annual Report on Exchange Arrangements and Exchange Restrictions (AREAER).
- Liberalization process initiated after WWII with the Bretton Woods agreements, aiming for world peace through wealth sharing.
- Technological revolution, particularly in information technology, is reshaping businesses and market structures, allowing opportunities for non-dominant firms to become dominant.
- Remote work is on the rise, with 71% of companies planning to permanently allow some amount of remote work.
- Culture is an integrated system of learned behavior patterns that shape how people perceive the world, interact, and make decisions, and it plays a crucial role in international business.
- Cross-cultural knowledge is essential for communication, business etiquette, decision-making, leadership, and consumer behavior in international business.
- Hofstede's Theory of Cultural Dimensions provides a framework for understanding cultural differences, including dimensions like power distance, individualism vs. collectivism, and masculinity vs. femininity.
- Power distance measures a culture's acceptance of hierarchical authority, with high power distance cultures respecting authority and hierarchy, and low power distance cultures preferring equality and questioning authority.
- Individualism vs. collectivism measures the extent to which people feel independent or interdependent as members of larger groups, emphasizing individual rights in individualistic cultures and group cohesion and loyalty in collectivist cultures.
- Masculinity vs. femininity is a cultural dimension that reflects the distribution of emotional roles between the genders, with masculine cultures valuing assertiveness and achievement, and feminine cultures valuing relationships and quality of life.
- Cross-cultural knowledge is crucial for avoiding misunderstandings, building trust, enhancing negotiations, expanding global markets, and managing multinational teams in international business.
- Hofstede's Theory of Cultural Dimensions also includes dimensions like uncertainty avoidance, long-term orientation vs. short-term orientation, and indulgence vs. restraint to explain cultural differences in values, beliefs, and behaviors.
Test your knowledge of global business and cross-cultural work with this quiz. Explore topics such as cross-border financial transactions, the impact of technological revolution, remote work trends, and the significance of cultural dimensions in international business. Gain insights into Hofstede's Theory of Cultural Dimensions and its role in communication, leadership, and consumer behavior.
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