International business

Cover
Half Title
Endorsement
Title Page
Copyright Page
Dedication
Table of Contents
List of Exhibits
1 International Business in an Age of Globalization
	An Age of Globalization
		What Does Globalization Mean to You?
	The Face of Globalization
		Who Benefits From Globalization?
		The Impact of Globalization
	Globalization in Transition
	Globalization and International Business
		What Is International Business?
		International Versus Domestic Business
		Why Expand Internationally?
	The Structure of this Book
		Pedagogical Thrust
	Notes
Part I Concepts and Theories in International Business
	2 International Trade Theory and Application
		International Trade Theories
			The Mercantilist Doctrine
			Absolute Advantage Theory
			Comparative Advantage Theory
			Heckscher-Ohlin Theorem
			The Leontief Paradox
			Human Skills and Technology-Based Views
			The Product Life-Cycle Model
			Infant Industry Argument
			Linder’s Income-Preference Similarity Theory
			The New Trade Theory
			Theory Assessment
		International Trade Patterns
			International Trade Volume and Growth
			Service Trade
			Trade Measurement
			Major Exporters and Importers
			US Trade Partners
			Trade Balance
		Arguments for Trade Restrictions
			The Sovereignty Argument
			The Lowest Common Denominator Argument
			Trade Reciprocity and Retaliation Against Unfair Trade Practices
			Optimal Tariff Theory
		Types of Trade Barriers
			Tariff Barriers
				Dumping and Anti-Dumping
			Non-Tariff Barriers
				Quotas
				Production Subsidies
				Emergency Import Protection
				Export Controls
				Embargoes and Boycotts
				Administrative Barriers
				Technical Standards
		Anti-Globalization Backlash and Intensification of Trade Conflicts
		Notes
	3 Foreign Direct Investment Theory and Application
		Definition and Types of Foreign Direct Investment
			FDI Versus Foreign Portfolio Investment
			Types of FDI
			Entry Mode
			The Strategic Logic of FDI
		How the MNE Benefits From Foreign Direct Investment
			Enhancing Efficiency From Location Advantages
			Improving Performance From Structural Discrepancies
			Increasing Return From Ownership Advantages
			Ensuring Growth From Organizational Learning
		The Impact of FDI On the Host (Destination) and Home (Origin) Countries
			Employment
			FDI Impact On Domestic Enterprises in the Host Country
		Current Theories On FDI
			Product Life-Cycle Theory
			Monopolistic Advantage Theory
			Internalization Theory and Other Transaction Cost-Based Theories
			The Eclectic Paradigm
		Learning and Capability-Based Perspectives
			The Dynamic Capability Perspective
			The Evolutionary Perspective
			The Real Option Perspective
			The Integration-Responsiveness Perspective
		Patterns of FDI
			Outward FDI
			Inward FDI
		FDI Entry Forms
		The Investment Environment
			FDI Decision Criteria
		Notes
	4 The Multinational Enterprise
		What Is a Multinational Enterprise?
			The Degree of Internationalization
			History of the MNE
		The World’s Largest MNEs
			The Growth of Service MNEs
		The Image of the MNE
			The MNE in the Public Eye
			The Borderless Corporation: Myth Or Reality?
		The Competitive Advantage of the MNE
			Capabilities and Competitive Advantage
				Types of Capabilities
				Capability Deployment
				Capability Upgrading
		The MNE From Emerging/Developing Economies (DMNE)
			The Largest Developing Country MNEs
			Obstacles Facing MNEs From Developing Economies
			DMNE Advantage in Global Markets
			Typical Features of DMNEs
		The Small and Medium-Sized International Enterprise (SMIE)
			What Is an SMIE?
				Size and Internationalization
			Obstacles to SMIE Internationalization
				Scale and Transaction Constraints
				Access to Capital
				Lack of Knowledge
				Lack of Market Power
				Vulnerability to Intellectual Property Violations
			SMIE Advantages in Internationalization
			SMIE Internationalization Features
				Internationalization Motivation
				Internationalization Patterns
				SMIE Exporter Profile
				Nature of FDI By SMIEs
		Notes
Part II Endowments and Environments of International Business
	5 Country Competitiveness
		Defining Country Competitiveness
			Country Competitiveness and MNEs
		Country-Level Determinants
			Institutional System
			Infrastructure
			Macroeconomic Soundness
			Science, Education, and Innovation
			Internationalization
		Industry-Level Determinants
		Firm-Level Determinants
		Individual-Level Determinants
		Interplay of the Four-Level Determinants
		Government Role
			A Historical Review
			A Renewed Recognition of Government Role
				Developed Countries
				Developing Countries
			Industrial Policy
		Notes
	6 The Cultural Environment
		What Is Culture?
		Culture and International Business
			Culture Does Not Explain Everything
			Correlates of Culture
				Language
				Religion
		National Culture Classifications
			Hofstede’s Dimensions of Culture
				Power Distance (PD)
				Uncertainty Avoidance (UA)
				Individualism/Collectivism (I/C)
				Masculinity/Femininity (M/F)
				Long-Term Orientation (LTO)
				Indulgence Versus Self-Restraint
				Criticism of Hofstede
			Schwartz’s Classification
			The GLOBE Classification
			Trompenaars and Hampden-Turner’s Classification
			Other Dimensions of Culture
			National Culture Clustering
				The Ronen and Shenkar Clustering
			Subsistence and Rice Theories
			Measuring Cultural Differences
		The Positive Role of Cultural Differences
		The Friction Framework
		Corporate Culture
		Other Layers of Culture
			Ethnicity
			Industry
			Ideology
			Demographics
			Cultural Etiquette
			Cultural Stereotypes
			Convergence and Divergence
		Notes
	7 The Political and Legal Environment
		The Political Environment
			Political System
			The Institutional Context
			Geopolitics and International Business Environment
		The MNE–Government Relationship
			The MNE Relationship With the Host Government
				MNE Political Objectives in the Host Country
				Host Government Objectives
				The Bargaining Power of the MNE and the Host Government
				Government Investment Support
			The MNE and Its Home Government
			Coalition Building and Influence Tactics
			Economic Freedom
			Political Risk
				The Measurement of Political Risk
				Types of Political Risk
				Strategies for Managing Political Risk
			Regional-Level Politics
			Micro-Region Political Processes
		The Legal Environment
			The Institutional Context
			Legal Jurisdiction
				Jurisdictional Levels
				International Jurisdiction
				Regional Jurisdiction
				National Jurisdiction
			Legal Issues of Interest to the MNE
				Rule of Origin Laws
				Competition Laws
				Marketing and Distribution Laws
				Product Liability Laws
				Intellectual Property Laws
				Treaties
		Notes
Part III Global Markets and Institutions
	8 International Economic Integration and Institutions
		International Economic Integration
		Global-Level Cooperation Among Nations
			The World Trade Organization (WTO)
				Background and Structure
				Functions and Measures
			The International Monetary Fund (IMF)
			The World Bank Group
			Other International Economic Organizations
				The United Nations Conference On Trade and Development (UNCTAD)
				The Organization for Economic Co-Operation and Development (OECD)
		Regional-Level Cooperation Among Nations
			Postwar Regional Integration
			North America: The US-Mexico-Canada Agreement (USMCA), Formerly North American Free Trade Agreement (NAFTA)
			Europe: The European Union (EU)
			Asia Pacific
			Latin America
			Africa and the Middle East
			Efficiency-Enhancing and Efficiency-Reducing Effects of Regionalization
		Commodity-Level Cooperation Among Nations
			Organization of Petroleum Exporting Countries (OPEC)
			Other Commodity Agreements
		Strategic Responses of MNEs
		Notes
	9 The International Monetary System and Financial Markets
		History of the International Monetary System
			The Gold Standard Period (1876–1914)
			The Inter-War Years and World War II (1914–1944)
			The Bretton Woods System (1944–1973)
			The Post-Bretton Woods System (1973–Present)
		Contemporary Exchange Rate Systems
			Fixed-Rate System
			Crawling Peg System
			Target-Zone Arrangement
			Managed Float System
			Independent Float System
			Advantages and Disadvantages of the Floating System
		Determination of Foreign Exchange Rates
			Foreign Exchange Rate Quotations
				Direct and Indirect
				Bid and Offer
				Spot and Forward
				Forward Premium and Discount
				Cross Rates
			Gold Standard
			Purchasing Power Parity (PPP)
			Interest Rate Parity (IRP)
			Foreign Exchange Rate Overshooting
			Implications for MNEs: Foreign Exchange Forecasting
		The Balance of Payments
			BOP Accounts
				Current Account
				Capital Account
				Financial Account
				Official Reserves Account
			Exchange Rates and BOP Imbalances
		International Foreign Exchange Markets
			Landscape of the International Foreign Exchange Market
			Market Participants and Functions
			Transaction Forms
				Spot Transactions
				Forward Transactions
				Swap Transactions
			Foreign Exchange Arbitrage
			Black Market and Parallel Market
		International Capital Markets
			International Money Markets
			International Bond Markets
			International Stock Markets
			International Loan Markets
		Major International Financial Crises in Recent Times
			The Asian Financial Crisis
				The Financial Perspective
				The Political/Institutional Perspective
				The Managerial Perspective
			The Global Financial Crisis
		Notes
Part IV International Business Strategies
	10 International Entry Strategies
		Dimensions of a Market Entry Strategy
		International Location Selection (Where)
			Locational Determinants
				Cost and Tax Factors
				Demand Factors
				Strategic Factors
				Regulatory Factors
				Socio-Political Factors
			Decision Framework
				Location and Strategic Objectives
				Location and Global Integration
				Location and Market Orientation
		Timing of Entry (When)
			Uncertainty and Potential for Learning
				Exogenous Uncertainty
				Endogenous Uncertainty
			Competitive Preemption and Pioneering Costs
				Early Mover Advantages
				Early Mover Disadvantages
			Decision Framework
		Entry Mode Selection (How)
			Entry Mode Choices
			Trade-Centered Entry Modes
				Exporting
				International Subcontracting
				Countertrade
			Transfer-Centered Entry Modes
				International Leasing
				International Licensing
				International Franchising
				Build-Operate-Transfer (BOT)
			FDI-Centered Entry Modes
				The Branch Office
				The Cooperative (Or Contractual) Joint Venture
				The Equity Joint Venture
				The Wholly Owned Subsidiary
				The Umbrella Holding Company
			Decision Framework
				Country-Specific Factors
				Industry-Specific Factors
				Firm-Specific Factors
				Project-Specific Factors
			Greenfield Investment, Acquisition, and Merger
			The Evolutionary Path
		Notes
	11 MNE Organization Structure and Design
		International Strategy and Organization Design
			Global Integration and Local Responsiveness
			MNE Strategy and Design
			Subsidiary Roles and Imperatives
				Subsidiary Autonomy
				Subsidiary Knowledge Flow
				Subsidiary Importance and Competence
		MNE Organizational Structures
			The National Subsidiary Structure
			The International Division Structure
			The Global Functional Structure
			The Global Geographic Structure
				Combined Forms Using Geographic Areas
				Region-Specific Factors in Establishing Geographic Structures
			The Global Product Structure
				Types of Global Product Structure
			The Global Matrix Structure
		Integrating Global Operations
			Tools for Global Integration
			The Transition Challenge
			The Corporate Headquarters
		Notes
	12 Building and Managing Global Strategic Alliances (GSAs)
		Defining Global Strategic Alliances
			Types of GSAs
			Rationales for Building GSAs
			Challenges Facing GSAs
		Building Global Strategic Alliances
			Selecting Local Partners
				Goal Compatibility
				Resource Complementarity
				Cooperative Culture
				Commitment
				Capability
			Negotiating Alliance Contracts
			Structuring Global Strategic Alliances
		Managing Global Strategic Alliances
			Managing Inter-Partner Learning
			Exercising Managerial Control
			Heightening Cooperation
				Personal Attachment
				Reducing Conflicts
			Thinking Ahead of Exit
		Notes
	13 Managing Global Research and Development (R&D)
		Why Globalize R&D?
			Benefits and Challenges of Global R&D
		Designing and Structuring Global R&D
			Types of Foreign R&D Units
			Selecting R&D Location
			Structuring Global R&D Activities
		Managing and Operating Global R&D
			Human Resource Management
			Autonomy Setting
			Global Planning
			Communication Improvement
				Rules and Procedures
				Electronic Communication
				Boundary Spanners
				Informal Network
				Cultural Adaptation
		Technology Transfer Across Borders
		Notes
Part V Functional International Business Areas
	14 Financial Management for Global Operations
		Why Learn Financial Management?
		International Trade Finance
			International Trade Payment
				Cash in Advance
				Letter of Credit (L/C)
				Documentary Collection
				Open Account
				Means of Payment Remittance
			Export Financing
				Private Sources
				Export Factoring and Forfeiting
				Bankers Acceptance
				Corporate Guarantee
				Governmental Sources
				Foreign Credit Insurance
		Financing for Global Business
			Intercompany Financing
			Equity Financing
			Debt Financing
			Local Currency Financing
			Financing Decisions
		Managing Foreign Exchange Risk and Exposure
			Foreign Exchange Risk and Exposure
			Transaction and Economic Exposures
			Managing Transaction Exposure
				Hedging With Financial Instruments
				Hedging With Contract Invoicing and Clause
			Managing Economic (Operating) Exposure
				Financial Initiatives
				Production Initiatives
			Global Coordination of Exposure Management
		Working Capital Management
			Cash Management
			Foreign Receivable Management
		Notes
	15 International Accounting for Global Operations
		Country Differences in Accounting
			Why Accounting Systems Differ Among Countries
				Institutions
				Societal Culture
				External Relations
			National Accounting Zones
			International Accounting Harmonization
			International Accounting Standards
		Foreign Currency Translation
			Commonly Used Translation Methods
			Harmonization of Translation Methods
			International Accounting Information Systems
		Transfer Pricing and Taxation Strategies
			Why Transfer Pricing?
			Transfer Pricing Techniques
			Transfer Pricing Regulations and Penalties
		Tax Havens, Treaties, and Strategies
			Tax Havens
			Tax Treaties
			Other Tax Strategies for MNEs
		Notes
	16 Global Marketing and Supply Chain
		The International Marketing Challenge
			Assessing Market Potential
			The Luxury Market
		Globalization and Localization in International Markets
			Globalization Forces
				Global Brands
				Why Global Products?
				Marketing Repercussions of a Global Approach
			Localization Forces
			Product Adaptation
			Country-of-Origin Effect
				Leveraging Positive Country Image
				Leveraging Nationalist Sentiments
			Branding
			Channel Decisions
				Intermediation
				Direct Marketing
				Niche Marketing
				Pricing
				Predatory Pricing
			Promotion
				Advertising
			Marketing Alliances
				Digital Marketing
		The Global Supply Chain
			The Globalization of Supply Chains
				The Challenge for SMIEs
			Global Sourcing
				Logistics Providers
			Customizing the Supply Chain
				National Variation
				Product and Logistics Customization
			Packaging
			Transportation Modes
				Maritime Transportation
				Rail
				Air Transport
			Crossing National Borders
		Notes
	17 Global Human Resource Management
		Strategic IHRM
		Staffing the MNE
			The Globalization of Boards of Directors
				Selecting Global Board Members
			Staffing the MNE Ranks
			Country-Specific Issues
		The Expatriate Workforce
			Types and Distribution of Expatriates
			Using Expatriates: Pros and Cons
			Expatriate Failure
			Expatriate Selection
				Expatriate Selection Instruments
			Preparing for a Foreign Assignment
				Expatriate Training
				Choosing a Training Method
			Compensation
				Cost and Elements of Expatriate Compensation
				Approaches to Expatriate Compensation
			Culture and Compensation
			Repatriation
		HRM in International Affiliates
			Human Resource Problems in Foreign Affiliates
		Notes
Part VI Emerging Issues in International Business
	18 Digital Connectivity and Global Strategies
		Internet and Global E-Commerce
		Digital Global Connectivity
			What Is Digital Global Connectivity?
			New Forms of Digital Global Connectivity
		How Digital Globalization Changes International Business
			Intangible Commerce Booms
			Knowledge Diffusion Grows
			Digital Infrastructure Vitalizes
			Mini-MNEs Rise
			Global Consumers Shake Up
			Emerging Economies Leapfrog
			Global Business Ecosystems Thrive
		Rewards and Risks of Digital Global Connectivity
			Rewards From Digital Global Connectivity
				Expanding Global Customers
				Reducing Transaction Costs
				Improving Consumer Experience
				Augmenting Open Innovation
				Buttressing Managerial Efficiency
			Risks From Digital Global Connectivity
				Interdependence Risks
				Cyberattacks and Information Security
				Reputation Fragility
				New Rivalry Disruptions
		Assessing Digital Infrastructure
			Physical Digital Infrastructure
			Science, Education, and Innovation in Digitization
			Institutional and Regulatory Environment of Digitalization
		Building Digital Global Connectivity Capabilities
		Global Business Platforms
		Notes
19 Global Sustainability and Social Responsibility
	Global Sustainability
	Corporate Social Responsibility in International Business
		MNE Social Responsibilities
			Environmental Responsibilities
			Consumer Protection
			Corporate Governance
		Global Guidelines and Mandates
		A Culture of Social Responsibility
		Auditing and Assessing MNE Social Responsibility
	Corruption in International Business
		Definition and Magnitude of Corruption
		The Origins of Corruption
		Drawbacks of Corruption
		Corruption Rankings
	Types of Corrupt Practices
		Smuggling
		Money Laundering
		Piracy and Counterfeiting
		Bribe Paying
		The Foreign Corrupt Practices Act (FCPA)
		The Globalization of the Fight Against Corruption
	Notes
20 International Entrepreneurship
	Defining International Entrepreneurship
	Comparative Entrepreneurship
		Culture and Entrepreneurship
		Funding New Ventures
	Cross-Border Entrepreneurship
		Internationalizing the Born Global Enterprise
	Notes
Index