 | Term | Definition |
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Absolute Advantage |
A theory first presented by Adam Smith, which holds that because certain countries can produce some goods more efficiently than other countries, they should specialize in and export those things they can produce more efficiently and trade for other things they need. |
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Ad Valorem duty |
A tariff assessed as a percentage of the value of the item. |
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Balance of payments |
Statement that summarizes all economic transactions between a country and the rest of the world during a given period of time |
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Balance of payments deficit |
An imbalance of some specific component within the balance of payments, such as merchandise trade or current account, that implies that a country is importing more than it exports |
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Balanced Scorecard |
An approach to performance measurement that endeavors to more closely link the strategic and financial perspectivs of a business and take a braod view of business performance |
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Bilateral Integration |
A form of integration between two countries in which they decide to cooperate more closely together, usuall in the form of tariff reductions |
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Chaebol |
Korean business groups that are similar to keiretsu and also contain a trading company as part of the group |
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Codetermination |
A process by which both labor and management participate in the management of a company |
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Common Market |
A form of regiional economic integration in which countries abolish internal tariffs, use a common external tariff, and abolish restrictions on factor mobility |
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Comparative Advantage |
The theory that there may still be global efficiency gains from trade if a country specializes in those products that it can produce more efficiently than other products |
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Consumer Price Index |
A measure of the cost of typical wage-earner purchases of goods and services expressed as a percentage of the cost of these same goods and services in some base period |
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Controlled Foreign Corporation (CFC) |
A foreign corporation of which more than 50 percent of the voting stock is owned by U.S. shareholders |
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Convergence |
Efforts by FASB and IASC to move towards a global set of accounting standards |
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Countertrade |
a reciprocal flow of goods or services valued and settled in monetary terms |
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Country-Similarity theory |
The theory that a producer, having developed a new product in response to observed market conditions in the home market, will turn to markets that are most similar to those at home |
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Country size theory |
The theory that larger countries are generally more self-sufficient than smaller countries |
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Dependencia theory |
The theory holding that LDCs have practically no power when dealing with MNEs as host countries |
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Economies of Scale |
The lowering of cost per unit as output increases because of allocation of fixed costs over more units produced |
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Elastic (product demand) |
A condition in which sales are likely to increase or decrease by a percentage that is more than the percentage change in income |
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Electronic Data Interchange (EDI) |
The electronic movement of money and information via computers and telecommunications equipment |
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Essential Industry Argument |
The argument holding that certain domestic industries need protection for national security purposes |
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Eurobond |
A bond sold in a country other than the one in whose currency it is denominated |
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Eurocredit |
A loan, line of credit, or other form of medium or long term credit on the Eurocurrency market that has a maturity of more than one year |
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Eurocurrency |
Any currency that is banked outside of its country of origin |
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Eurodollars |
Dollars banked outside of the US |
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European Terms |
The practice of using the indirect quote for exchange rates |
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Expropriation |
The taking over of ownership of private property by a country's government |
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Externalities |
External economic costs related to a business activity. |
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Extraterritorality |
The extension by a government of the applications of its laws to foreign operations of companies |
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Factor mobility |
The free movement of factors of production, such as labor and capital across national borders |
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First-mover advantage |
A cost-reduction advantage due to economies of scale attained through moving into a foreign market ahead of competitors |
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Fischer effect |
The theory about the relationship between inflation and interest rates |
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Foreign direct investment |
An investment that gives the investor a controlling interest in a foreign company |
