SOM 122 Lecture Notes - Lecture 7: Foreign Direct Investment, Cadency
22 Oct 2018
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Absolute advantage: the ability to produce something more efficiently than any other country (ex. Comparative advantage: the ability to produce some products more efficiently than others. National competitive advantage: stems from a combination of factor conditions, demand conditions, related and supporting industries, and firm strategies, structures, and rivalries (ex. International firms: firm that conducts a significant portion of its business in foreign countries. Multinational firms: firm that designs, produces, and markets products in many nations. Independent agent: foreig(cid:374) i(cid:374)dividual or orga(cid:374)izatio(cid:374) that agrees to represe(cid:374)t a(cid:374) exporter"s interests. Licensing agreement: agreement in which firms choose foreign individuals or organizations to manufacture or market their products in another country. Branch offices: foreign office set up by an international or multinational firm. Strategic alliance: strategy in which two or more organizations collaborate on a project for mutual gain. Foreign direct investment: agreement in which a firm buys or established tangible assets in another country.
