International Business and Political Systems Quiz

International Business and Political Systems

• Monopolistic advantage theory emphasizes the need for firms to have unique resources and capabilities for internationalization strategy through FDI.
• Internationalization theory explains the process of firms acquiring and retaining value-chain activities inside the company to gain control over foreign operations.
• Dunning's Eclectic Paradigm proposes three conditions for companies to internationalize through FDI: ownership-specific advantages, location-specific advantages, and internationalization advantages.
• Political systems consist of formal institutions like legislative bodies, political parties, and trade unions, constantly evolving to meet constituent demands.
• Legal systems interpret and enforce laws, establishing norms for conduct, resolving disputes, and providing protections for private property and company assets.
• International businesses face demands from various environments, and political constraints and risks are inherent in conducting business across national boundaries.
• Country risk in international business includes exposure to potential loss or adverse effects due to developments in a country’s political and/or legal environment.
• Dimensions of country risk include harmful or unstable political systems, unfavorable laws and regulations, inadequate legal systems, bureaucracy, corruption, and government intervention.
• Political environment key players include government, political parties, trade unions, interest groups, and public opinion, which can influence tax rates, tariffs, and regulations.
• Authoritarianism, socialism, and democracy are different political systems with varying levels of government control, individual rights, and economic ideologies.
• Social democracy supports economic and social intervention for social justice through democratic means and is associated with high corporate tax rates.
• Democracy is characterized by accountability to the voting public through free elections, private property rights, limited government, openness, and a lack of excessive regulation.

Ireland's Foreign Direct Investment and Theories on International Trade and Investment

• Ireland is the second most attractive country globally for Foreign Direct Investment (FDI), following Singapore.
• IDA Ireland is the agency responsible for attracting and retaining inward FDI into Ireland.
• Service multinational corporations (MNCs) in sectors like media, education, information services, travel, tourism, healthcare, and professional services are growing in Ireland due to economic transformation, regulatory systems, and communication advances.
• MNCs have a competitive advantage with global scale, large capital, human resources, brand, and technological base.
• Dynamic capability theory suggests that MNCs need to develop dynamic capabilities to create, deploy, and upgrade resources for sustained competitive advantage.
• MNCs need organizational capabilities to extend and exploit their superior knowledge throughout their operations.
• Knowledge transfer is the most important capability for MNCs to develop.
• Theories on international trade include free trade, comparative advantage, competitive advantage, and factors like natural endowments and deliberate national practices.
• Mercantilism and neo-mercantilism influence trade policies and beliefs, affecting imports, exports, and trade surpluses.
• The principles of absolute advantage and comparative advantage guide countries in producing and trading goods efficiently.
• The Porter Diamond Model outlines the determinants of national competitiveness, including demand conditions, firm strategy, structure and rivalry, factor conditions, related and supporting industries, and national industrial policy.
• The internationalization process of the firm involves stages from domestic focus to committed involvement, with born global firms being young firms that aggressively pursue foreign markets.

International Business and Political Systems

• Monopolistic advantage theory emphasizes the need for firms to have unique resources and capabilities for internationalization strategy through FDI.
• Internationalization theory explains the process of firms acquiring and retaining value-chain activities inside the company to gain control over foreign operations.
• Dunning's Eclectic Paradigm proposes three conditions for companies to internationalize through FDI: ownership-specific advantages, location-specific advantages, and internationalization advantages.
• Political systems consist of formal institutions like legislative bodies, political parties, and trade unions, constantly evolving to meet constituent demands.
• Legal systems interpret and enforce laws, establishing norms for conduct, resolving disputes, and providing protections for private property and company assets.
• International businesses face demands from various environments, and political constraints and risks are inherent in conducting business across national boundaries.
• Country risk in international business includes exposure to potential loss or adverse effects due to developments in a country’s political and/or legal environment.
• Dimensions of country risk include harmful or unstable political systems, unfavorable laws and regulations, inadequate legal systems, bureaucracy, corruption, and government intervention.
• Political environment key players include government, political parties, trade unions, interest groups, and public opinion, which can influence tax rates, tariffs, and regulations.
• Authoritarianism, socialism, and democracy are different political systems with varying levels of government control, individual rights, and economic ideologies.
• Social democracy supports economic and social intervention for social justice through democratic means and is associated with high corporate tax rates.
• Democracy is characterized by accountability to the voting public through free elections, private property rights, limited government, openness, and a lack of excessive regulation.

Test your knowledge of international business and political systems with this quiz. Learn about theories of internationalization, political and legal systems, country risk, and different political environments. Gain insight into how these factors impact the conduct of business across national boundaries.