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31 Cards in this Set
- Front
- Back
agglomeration
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clustering of economic activites in certain locations
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bargaining power
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ability to extract a favorable outcome from negotiations due to one party's strengths
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contagion (imitation effect)
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the reaction of local firms to rise to the challenge demonstrated by MNE's through learning and imitation
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demonstration effect
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the reaction of local firms to rise to the challenge demonstrated by MNE's through learning and imitation
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dissemination risk
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the risk associated with with unauthorized diffusion of firm-specific know-how
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Downstream vertical FDI
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a type of vertical FDI in which a firm engages in a downstream stage of the value chain in a host country
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Expropriation
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1) government confiscation of foreign assets 2) activities that enrich controlling shareholders at the expense of minority shareholders
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FDI flow
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the amount of FDI moving in a given period (usually a year) in a certain direction
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FDI inflow
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inbound FDI moving into a country in a year
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FDI outlow
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outbound FDI moving out of a country in a year
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FDI stock
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totall accumulation of inbound FDI in a country or outbound FDI from a country across a given period (usually several years)
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Foreign portfolio investment (FPI)
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investment in a portfolio of foreign securities such as stocks and bonds
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Free market view on FDI
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a political view that suggests that FDI unrestricted by government intervention is the best
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Horizontal FDI
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a type of FDI in which a firm duplicates its home country-based competencies in foreign countries
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internalization
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the replacement of cross-border markets (such as exporting and importing) with one firm (the MNE)locating and operating in two or more countries
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intrafirm trade
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international transactions between two subsidaries in two countries controlled by the same MNE
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knowledge spillover
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knowledge diffused from one firm to others among closely located firms
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location
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advantages enjoyed by firms operating in a certain location
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management control rights
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the rights to appoint key managers and establish control mechanisms
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market imperfection (market failure)
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the imperfect rules governing international transactions
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Obsolescing bargain
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the deal struck by MNE's and host governments, which change their requirements after the intitial FDI entry
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OLI advantage
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a firm's quest for Ownership, Location, and Internalization advantages through FDI
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oligopoly
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industry dominated by s small number of players
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ownership
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an MNE's possession and leveraging of certain valuable, rare, hard-to-imitate, and organizationally embedded VRIO assets overseas in the context of FDI
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pragmatic nationalism on FDI
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a politcal view that only approves FDI when its benefits outweigh its costs
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radical view on FDI
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a political view that is hostile to FDI
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sovereign wealth Fund (SWF)
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a state-owned investment fund composed of financial assets such as stocks, bonds, real estate, or other financial instruments funded by foreign exchange assets
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Sunk cost
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costs that a firm has to endure even when its investment turns out to be unsatisfactory
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technology spillover
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technology diffused from foreign firms to domestic firms
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upstream vertical FDI
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a type of vertical FDI in which a firm engages in an upstream stage of the value chain in a host country
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Vertical FDI
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a type of FDI in wchih a firm moves upstream or downstream at different value chain stages in a host country
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