Ch 8 Bus498

The establishment of a new operation in a foreign country

The amount of foreign direct investment undertaken over a given time period (normally one year)

The total accumulated value of foreign-owned assets at a given time

Flow of foreign direct investment out of a country

Flow of foreign direct investment into a country

Argument that combining location specific assets or resource endowments and the firm's own unique assets often requires FDI; it requires the firm to establish production facilities where those foreign assets or resource endowments are located

Sale of products produced in one country to residents of another country

Occurs when a firm (the licensor) licenses the right to produce its product, use its production processes, or use its brand name or trademark to another firm (the licensee). In return fro giving the licensee these rights, the licensor collects a royalty fee on every unit the licnesee sells

Marketing imperfection approach to foreign direct investment

Imperfections in the operation of the market mechanism

An industry composed of a limited number of large firms

Arises when two or more enterprises encounter each other in different regional markets, national markets, or industries

Advantages that arise from using resource endowments or assets that are tied to a particular foreign location and that a firm finds valuable to combine with its own unique assets (such as the firm's technological, marketing, or management know-how)

Knowledge spillovers

National accounts that track both payments to and receipts from foreigners

In the balance of payments, records transactions invovling the export or import of goods and services

FDI undertaken to serve the home market