Globalizing Business Chapter 1

A business that operates across national borders.

Business activities that involve both international and domestic operations.

A company that owns or controls production or services in multiple countries.

Investment in a foreign country's business to gain control and management.

Countries that are rapidly developing their economies.

The total value of goods and services produced by a country's residents and businesses, regardless of location.

The total value of all final goods and services produced within a country's borders during a specific period.

GDP plus income earned by residents from non-resident sources.

An adjustment to GDP that considers differences in the cost of living between countries.

The three major economic regions: North America, Western Europe, and Japan.

An acronym for the emerging economies of Brazil, Russia, India, and China.

A forum for the leaders of 19 major countries and the European Union to discuss global economic issues.

The vast majority of the world's population, estimated at around four billion people, who earn less than $2,000 per year.

A theory explaining how certain industries within a nation become internationally competitive, based on factors like resources, infrastructure, and innovation.

Discourages imports by imposing a tax (tariff) on imported goods, making them more expensive.

A tax imposed on a good brought in from another country.

Net losses that occur when import tariffs are imposed, often due to reduced trade and consumer welfare.

Trade restrictions that discourage imports using methods other than taxes, often involving regulations or quotas.

A limit on the quantity of a good that can be imported into a country.

Exporting countries voluntarily agree to limit their exports to a certain country.

The argument that young domestic companies require government protection to survive against mature foreign competitors.

A situation where a nation imports more goods and services than it exports, leading to a negative balance of trade.

A situation where a nation exports more goods and services than it imports, leading to a positive balance of trade.

A classical theory that emphasizes exporting more than importing to accumulate wealth (gold and silver). It sees international trade as a zero-sum game where one nation's gain is another's loss.

A nation's ability to produce a good or service more efficiently (with less input) than any other nation, allowing it to specialize in that good and gain from trade.

A nation's ability to produce a good or service at a lower opportunity cost than another nation, even if it's not the 'best' producer overall. This leads to specialization and gains from trade.

The value of the next best alternative foregone when choosing a certain economic activity. It's the cost of choosing one option over another.

This theory explains comparative advantage based on a nation's abundance of factors of production (labor, land, technology). Nations specialize in producing goods that utilize their abundant factors.

This theory explains how trade patterns change over time as a product evolves. A new product is initially produced and exported by the innovator, then its production shifts to other nations as it matures.

This theory argues that government intervention in certain industries can give a nation strategic advantage in global markets. Early entry into a market is crucial for success.

The benefits gained by being the first entrant into a market, such as building brand recognition, establishing customer loyalty, and controlling key resources.