International Business Midterm Exam

Suggested Study Guide

Chapter 1

-What is meant by globalization (be able to explain both the globalization of markets and production)

-What global institutions have facilitated globalization?

-What have been the drivers of globalization

-What has happened to trade barriers and technology

-Be able to explain how the demographics of the global economy have changed in terms of world output/exports and foreign direct investment

-What players have had an increasing or decreasing role

-What changes have we seen in the nature of multinational companies or enterprises

-What changes have occurred in terms of countries and their political economies

-What are the pros and cons of globalization as seen by labor, environmental, and other groups

Chapters 2 and 3

-Understand the components of a country attractiveness analysis (risks – political, legal, economic).

-Be able to define the different types of political systems (democracies and what constitutes a democracy; totalitarian governments and the different types)

-Be able to define the different types of economic systems (market, command, mixed)

-Understand the different types of legal systems and their implications on business. What important legal differences should you know about when entering a country?

-How do you assess the economic status of a country (growth, purchasing power, distribution of income, GNI, human development index)?

-Understand the tie between innovation, entrepreneurship and economic systems

-Understand the tie between geography, education and economic development

-What is deregulation and privatization?

-What changes have been going on overall in terms of political economies (this is in both chapters 1 and 2)

Chapter 4

-What is culture?

-What are the determinants of culture?

-Know what is meant by social stratification, class and caste systems, social mobility and class consciousness

-Understand how different religions may have different economic implications and what are these

-Understand the value differences we talked about in class (some we covered in class others you should know from your book readings). Know how these values would impact behavior in organizations.

Chapter 6

Understand the basic message of each trade theory:

Mercantilism

Absolute advantage

Comparative advantage

Relative Factor Endowment theory

Product Life cycle

Strategic Trade theory or New trade theory

Porter’s Competitive Advantage of Nations …which theories advocate government involvement and which don’t?

Chapter 7 - The Political Economy of International Trade

· Know the trade barriers and who they benefit and hurt: tariffs, subsidies, quotas, VERs, local content requirements, administrative policies, antidumping policies

· Understand the rationales for trade intervention:

· Political: Jobs/industries, National security/defense argument, Bargaining/negotiating power, foreign policy, consumer protection, human rights

· Economic: Infant industry argument, Strategic Trade Policy, Industrialization & economic development

· What role do special interest groups play?

· GATT/WTO: What is it and its purpose

· Uruguay round agreements – including creation of the WTO and how this differs from GATT

· Success of WTO and current issues

Chapter 9 - Regional Economic Integration

-Types of regional agreements

-Effect of regional agreements

o For companies, consumers, governments

o For the world: understand trade creation versus trade diversion

-European Union: Major progress/issues (Euro, expansion, further political integration) & Issues/Problems/Concerns moving forward…pros and cons of Euro, expansion

-NAFTA: Characteristics/concerns

-Issues in specific regions and in some cases in specific regional agreements of relevance ...MERCOSUR, APEC, ASEAN, or general issues with agreements in Africa