International Business Environment
Government financial assistance to a domestic producer
Movements in a stock portfolio’s value attributable to
macroeconomic forces affecting all firms in an economy,
rather than factors specific to an individual firm.
A country with exceptionally low, or no, income taxes.
An agreement specifying what items of income will be
taxed by the authorities of the country where the income
Translating assets valued in a foreign currency into the
home currency using the exchange rate that existed when
the assets were originally purchased.
The extent to which income from individual transactions
is affected by fluctuations in foreign exchange values.
A firm that tries to simultaneously realize gains from
experience curve economies, location economies, and
global learning, while remaining locally responsive.
Treaty of Rome-
This 1957 treaty established the European Community.
A project in which a firm agrees to set up an operating
plant for a foreign client and hand over the “key” when
the plant is fully operational.
A currency that plays a central role in the foreign
exchange market (e.g., the U.S. dollar and Japanese yen).
Voluntary export restraint (VER)-
A quota on trade imposed from the exporting country’s
side, instead of the importer’s; usually imposed at the
request of the importing country’s government
International institution set up to promote general
economic development in the world’s poorer nations.
World Trade Organization (WTO)-
The organization that succeeded the General Agreement
on Tariffs and Trade (GATT) as a result of the successful
completion of the Uraguay round of GATT negotiations.
Zero sum game-
A situation in which an economic gain by one country
results in an economic loss by another.