Absolute Advantage
the ability to produce something more efficiently than any other country can
Association of Southeast Asian Nations (ASEAN)
organization for economic, political, social, and cultural cooperation among Southeast Asian nations
Balance of Payments
flow of all money into or out of a country
Balance of Trade
the economic value of all the products that a country exports minus the economic value of all the products it imports
Branch Office
foreign office set up by an international or multinational firm
Business Practice Law
law or regulation governing business practices in given countries
Cartel
association of producers whose purpose is to control supply and prices
Comparative Advantage
the ability to produce some products more efficiently than others
Dumping
practice of selling a product abroad for less than the cost of production
Embargo
government order banning exportation or importation of a particular product or all products from a particular country
Euro
a common currency shared among most of the members of the EU (excluding Denmark, Sweden, and the United Kingdom)
European Union (EU)
agreement among major European nations to eliminate or make uniform most trade barriers affecting group members
Exchange Rate
rate at which the currency of one nation can be exchanged for the currency of another nation
Export
product made or grown domestically but shipped and sold abroad
Exporter
firm that distributes and sells products to one or more foreign countries
Foreign Direct Investment (FDI)
arrangement in which a firm buys or establishes tangible assets in another country
General Agreement on Tariffs and Trade (GATT)
international trade agreement to encourage the multilateral reduction or elimination of trade barriers
Goal Orientation
the manner in which people are motivated to work toward different kinds of goals
Globalization
process by which the world economy is becoming a single interdependent system
Import
product made or grown abroad but sold domestically
Importer
firm that buys products in foreign markets and then imports them for resale in its home country
Independent Agent
foreign individual or organization that agrees to represent an exporters interests
International Firm
firm that conducts a significant portion of its business in foreign countries
Licensing Arrangement
arrangement in which firms choose foreign individuals or organizations to manufacture or market their products in another country
Local Content Law
law requiring that the products sold in a particular country be at least partly made there
Multinational Firm
firm that designs, produces, and markets products in many nations
National Competitive Advantage
international competitive advantage stemming from a combination of factor conditions, demand conditions, related and supporting industries, and firm strategies, structures, and rivalries
North American Free Trade Agreement (NAFTA)
agreement to gradually eliminate tariffs and other trade barriers among the United States, Canada, and Mexico
Offshoring
the practice of outsourcing to foreign countries
Outsourcing
the practice of paying suppliers and distributors to perform certain business processes or to provide needed materials or services
Power Orientation
the beliefs that people in a culture about the appropriateness of power and authority differences in hierarchies such as business organizations
Protectionism
practice of protecting domestic business against foreign competition
Quota
restriction on the number of products of a certain type that can be imported into a country
Social Orientation
a person's beliefs about the relative importance of the individual versus groups to which that person belongs
Strategic Alliance
arrangement (also called joint venture) in which a company finds a foreign partner to contribute approximately half of the resources needed to establish and operate a new business in the partner's country
Subsidy
government payment to help a domestic business compete with foreign firms
Tariff
tax levied on important products
Time Orientation
the extent to which members of a culture adopt a long-term versus short-term outlook on work, life, and other elements of society
Trade Deficit
situation in which a country's imports exceed its exports, creating a negative balance of trade
Trade Surplus
situation in which a country's exports exceed its imports, creating a positive balance of trade
Uncertainty Orientation
the feeling individuals have regarding uncertain and ambiguous situations
World Trade Organization (WTO)
organization through which member nations negotiate trading agreements and resolve disputes about trade policies and practices