Chapter 1- Introduction: What is International Business?
Globalization of Markets
Ongoing economic integration and growing interdependency of countries worldwide
Small and Medium-Sized Enterprise (SME)
a company with 500 or fewer employees (as defined in Canada and the United States)
Multinational Enterprise (MNE)
a large company with substantial resources that performs various business activities through a network of subsidiaries and affiliates located in multiple countries
Born Global Firm
a young entrepreneurial company that initiates international business activity very early in its evolution, moving rapidly into foreign markets
International Trade
exchange of products and services across national borders, typically through exporting and importing
Commercial Risk
firm's potential loss or failure from poorly developed or executed business strategies, tactics, procedures
Foreign Direct Investment (FDI)
internationalization strategy in which the firm establishes a physical presence abroad through acquisition of productive assets such as capital, technology, labor, land, plant, and equipment
International Portfolio Investment
passive ownership of foreign securities such as stocks and bonds for the purpose generating financial returns
International Business
performance of trade and investment activities across national borders
Country Risk
potentially adverse effects on company operations and profitability caused by developments in the political, legal, and economic environment in a foreign country
Importing or Global Sourcing
procurement of products or services from suppliers locate abroad for consumption in the home country or a third country
Currency Risk
risk of adverse fluctuations in exchange rates
Exporting
sale of products or services to customers located abroad, from a base in the home country or a third country
Cross-Cultural Risk
situation or event where a cultural misunderstanding puts some human value at stake
Internationalization
tendency of companies to systematically increase the international dimension of their business activities
International Investment
the transfer of assets to another country or the acquisition of assets in that country
