MARKET 1 Lecture Notes - Lecture 20: Externality, High Standard Manufacturing Company, Human Capital
Document Summary
Globalization = process of closer integration and exchange between different countries and peoples worldwide, made possible by falling trade and investment barriers, advances in telecommunications, and reductions in transportation costs. Combined, these factors reduce the costs of doing business around the world, opening the doors to a much larger market than any one home country. Consequently, the world"s market economies are becoming more integrated and interdependent. Multinational enterprise (mne) = a company that deploys resources and capabilities in the procurement, production, and distribution of goods and services in at least two countries. Foreign direct investment (fdi) = a firm"s investments in value-chain activities abroad. Global strategy = a firm"s strategy to gain and sustain a competitive advantage when competing against other foreign and domestic companies around the world. Going global: why: advantages of expanding internationally. The main reasons firms expand abroad are to:
