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REVIEW QUESTIONS CHAPTER 1, Q. what has accounted for the long-term…

- - - - non-equity contracting: the company doesn't own any part of the business in the foreign country
        
        types of contracting:
        
        OUTSOURCING: hiring a company in another country to do specific tasks (like manufacturing or customer service)
        
        LICENSING: giving permission to another company in a different country to use your brand, product r technology
        
        FRANCHISING: allowing a company in another country to run a branch of your business, following your rules (like fast-food chains).
        
        low-commitment, low-control: the company has less say in how things are done
      - equity-based (owning part of the business in another country) foreign direct investment (FDI) undertaken by multinational enterprises (MNEs).
        
        high-commitment, high-control: the company takes on more responsibility and has more control
        
        Foreign direct investment (FDI): involves firms based in one country owning at least 10% of a firm producing in another country and thereby exerting management influence, a high-commitment/high-control option.
        
        categories of countries
        
        LMICs (Low- and Middle- Income Countries)
        
        lower average incomes
        
        High-Income Countries
        
        higher average incomes (wealthier)
        
        trends over time
        
        1990s Surge: increase inf FDI inflows, especially into high-income countries
        
        due to more mergers and acquisitions (M&A) of companies
        
        Growth in Middle-Income Countries
        
        attracting more FDI
        
        GFC
        
        global financial crisis happened in 2008 and 2009, causing a major drop in FDI inflows
        
        After the crisis
        
        FDI inflows recovered and reached about US$2 trillion
        
        Recent Decline
        
        2016-2018, decrease in FDI inflows, affecting high-income countries
      - both essential ways for companies to expand and operate globally in today's interconnected world
      - Migration
        
        considered a part of international production, despite the significant impediments to this aspect of globalization
  - - - ex. transactions in currencies, equities/stocks, government bonds, corporate bonds, real estate
    - - to buy and sell these assets as part of managing wealth
- - - - one company buys part from another in a different country
    - - a company owns businesses in other countries that make parts or products
    - - breaking up the production process and moving different stages away from their original national location
        
        major feature of modern globalization
        
        MODERN GLOBALIZATION
        
        GVCs
        
        its key parts
        
        FDI
        
        MNEs
        
        Migration
- - - - the ability to coordinate both international trade logistics and international production systems
      - the development of container shipping, that combined with the computer, opened the way to modern globalization