IB 201 Lecture Notes - Lecture 2: Halakha, Stamen, Voluntary Export Restraints
6 Dec 2016
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Document Summary
Chapter 2: international trade and foreign direct investment. May 21, 2014: what is international trade theory, international trade, concept of the exchange between people and entities of two different nations, they trade, because they believe there will be a benefit. Countries would import goods that required resources were in short supply, but higher demand: china and india have abundant cheap labor. History demonstrates that global firms (in industries such as commodities and oil) often choose to do business with countries whose governments control that industry. The government serves as partner for long-term access and investment for these commodities. Horizontal fdi (when company is trying to open a new market). Vertical fdi (invests internationally to provide input to core oper in home country). Backward vertical fdi (firm brings the goods back to home country; act as supplier). Forward vertical fdi (firm sells goods into local or regional market; as distributor).
