Trắc Nghiệm

1. International business is any commercial transaction that crosses the

borders of two or more nations
True
2. Imports are goods and services purchased abroad and brought into a
country
True
3. Factor proportion theory states that factors in great supply relative to
demand will be more costly than factors in short supply relative to
demand
a. False
4. In the maturing product stage of the international product life cycle
theory, production facilities are introduced in countries with the highest
demand.
b. True
5. Today, NAFTA is the international organization that enforces the rules
of intermational trade by reducing both tariffs and nontariff barriers to
international trade
b. True
6. International trade should be restricted by tariffs and quotas in order to
give Lountry an absolute advantage
False
3. When a country is not able to produce a good more efficiently than
other nations, but produces the good more efficiently than it does any
other good, it is said to have a(n).....
D) comparative advantage
4. The condition that results when the value of a nation's imports is
greater than the value of its exports is called ....
A) a trade deficit
5. Country A produces a ton of coffee using one unit of resources.
Country B produces two tons of coffee using one unit of resources.
Which of the following IS TRUE regarding Country A and Country B?
B) Country B has an absolute advantage in producing coffee.
6. The theory of absolute advantage measures a nation's wealth by
determining the.....
D) living standards of its people
4. In the maturing product stage of the international product life cycle
theory. production facilitics are introduced in countries with the highest
demand.
b. True
The terms INTERNATIONALIZATION refers to entities cooperating
across national boundaries
Goods and services purchased abroad and brought into a country are
called IMPORTS
Samsung Corporation is an example of a MULTINATIONAL
CORỔPRATION
THE FACTOR PROPORTIONS theory states that countries produce and
export goods that require resources available in abundance and import
goods that require resources in short supply.
 DEFINITION
International Business
International business (kinh doanh quốc tế) is the total of all
business transaction that cross the borders of two or more countries.
Imports (nhập khẩu) -all the goods and services brought into a country
that were purchased from organizations located in other countries.
Exports (xuất khẩu) - all the goods and services sent from one
country to other nations.
Globalization: is the process involving the integration of national
economies
Globalized Markets – Places where buyers and sellers meet to
exchange goods and services
Global Products – Products marketed in all countries essentially
without any changes
International company is a business that engages directly in any
form of IB activity such as exporting, importing or international
production.
Multi-National Corporation (MNC) a business that has direct
investments abroad in multiple countries.
The National Business Environment includes all the elements that
are external to our company but that can affect its performance.
Foreign Business Environment includes all the elements that are
external to our company but that can affect its performance in our
potential overseas market...
International Business Management (IBM) the elements over which
a company can exercise a greater measure of control—such as
management, marketing & production.
GNP stands for Gross National Product. Simply put, it is the total
value of services and final products that citizens (nationals) of a country
create within the territory of that country and the value of services and
final products that citizens create abroad. GDP stands for Gross Domestic
Product, which translates to gross domestic product or gross domestic
product. This is a consumer index that measures the total market value of
all goods and services produced in a country in a given period.
Chapter summary
1) International business is the total of all business transactions that cross
the borders of two or more countries.
2) Globalization is the process involving the integration of national
economies
3) Measuring Globalization
- Economic Integration
- Personal contact
- Technology
- Political Engagement
4) What stimulates(kích thich) globalization?
- Lower Trade and Investment Barriers
- The Role of Technological Innovation
5) Why do companies go international?
- International sales growth opportunities
- Excess production capacity
6) Who Participates in IB?
- Entrepreneur
- Small and Medium Enterprises
- Large Multinational Corporations (MNCs)
Culture in Business
Culture – the set of values, beliefs, rules, and institutions held by a
specific group of
people.
Ethnocentricity is the belief that one’s own ethnic group or culture is
superior to that of others.
National Culture Supports and promotes the concept of a national culture
by building museums, and monuments to preserve the legacies of
important events and people
Subcultures A group of people who share a unique way of life within a
larger, dominant culture It differs from the dominant culture in languages,
race, values, or attitudes (in VN, 54 ethnic minority groups)
Aesthetics - what as a culture considers to be in “good taste” in the
art, the imagery evoked by expressions, and the symbolism of certain
colors.
➢ Values are ideas, beliefs, and customs to which people are
emotionally attached.
➢Attitudes are positive or negative evaluations, feelings, and
tendencies that individuals harbor toward objects or concepts.
Manners (phong tuc) Appropriate ways of behaving, speaking, and
dressing in a culture
Customs (tap quan) A behavior that is practiced within a homogenous
group of people
Politics( chính trị) and Law in Business
Political Systems a political system includes the structure, process and
activities by which a nation governs itself.
International trade: Purchase, sale, or exchange of goods and services
across national borders.
Theories of International Trade: Mercantilism, Absolute
Advantage, Comparative Advantage, Factor Proportions Theory,
International Product Life Cycle, New Trade Theory, National
Competitive Advantage.
Mercantilism: Maintain trade surplus and avoid trade deficit at all cost.
Comparative advantage: is inability to produce a good more efficiently
than other nations, but produces the good more efficiently than it does
any other good.
Factor Proportions Theory: Theory states that countries produce and
export goods that require resources (factors) that are abundant and import
goods that require resources in short supply. The theory says input for
production includes: labor and land & capital. Cheap input means that
you can produce more competitive products and you can export your
products.
Int’l product life cycle: New product stage: demand in domestic market
is highly uncertain => Company produces small volume, no export
market until late of this stage
Maturing product stage: Domestic and international markets know
product and its benefit. Demand rises. Export accounts for greater share
of total product sales => motivating company produce in the foreign
country. At the end of the stage, product is sold and produced in
developing countries
Standardized product stage: competition => lowering price to
maintain sales level, searching low-cost production bases in developing
nations. Trong nc ngừng sản xuất.
 - In your opinion, does globalization produce more good than bad
OR more bad than good? Why?
Globalization is a major factor in the modern international business
landscape, presenting both opportunities and challenges to countries and
companies. From an international business management perspective, I
believe that globalization brings more benefits than disadvantages,
especially when it is managed strategically and effectively.
First, globalization promotes economic growth: it has led to increased
trade, investment, and economic growth in many countries, lifting
millions of people out of poverty and improving their living standards.
Second, it promotes cultural exchange: it promotes cultural exchange and
understanding, allowing people to share ideas, traditions, and
innovations. This can enrich societies. Next, globalization helps us access
technology: it accelerates the spread of technology and innovation,
allowing countries to leapfrog stages of development and improve
productivity. Additionally, it benefits consumers: Consumers often
benefit from a wider variety of goods and services at lower prices due to
increased competition and access to global markets.
In conclusion, while globalization is not without its challenges, the
benefits it offers to international business and the global economy are
substantial. Therefore, I believe that globalization produces more positive
impacts than negative ones, especially when approached strategically and
sustainably.
 Challenges of doing business in emerging market
Doing business in emerging markets presents numerous opportunities, but
it also comes with several challenges. These challenges are often tied to
the economic, political, and social dynamics of these markets. Here are
some key challenges companies face when operating in emerging
markets:
1. Political Instability
Political instability, such as frequent changes in government, civil unrest,
corruption, or the risk of expropriation, can create significant uncertainty
for businesses.
2. Regulatory and Legal Challenges
Emerging markets often have complex and sometimes opaque regulatory
frameworks. Legal systems may be underdeveloped or inefficient, and
there can be a lack of transparency in enforcing laws.
3. Currency and Economic Volatility
Emerging markets are often more prone to currency fluctuations,
inflation, and economic instability. The value of local currencies can be
highly volatile, which can affect profitability and the cost of doing
business.
4. Infrastructure Deficiencies
Many emerging markets suffer from inadequate infrastructure, including
transportation networks, utilities, and communication systems. Poor
infrastructure can increase operational costs, reduce efficiency, and limit
the ability to reach customers in remote areas.
5. Cultural and Language Barriers
Entering a new market often requires an understanding of local customs,
traditions, and consumer behavior. Misunderstanding local culture or
failing to adapt marketing strategies to local tastes can result in poor sales
and brand rejection.
6. Corruption and Governance Issues
Corruption is a common challenge in many emerging markets.
Businesses may be required to engage in bribery or face unfair
competition due to government corruption.
7. Access to Finance and Credit
In emerging markets, access to finance can be limited, especially for
small and medium-sized enterprises (SMEs). Local financial systems may
lack transparency, or local banks may have stringent lending criteria,
making it difficult for businesses to secure the capital they need to grow
or expand.
8. Competition from Local and Global Players
Emerging markets often attract a mix of local and international
competitors. While local competitors may have a better understanding of
the market and lower operating costs, international companies may
benefit from superior technology, better brand recognition, or financial
strength.
9. Supply Chain and Logistics Issues
Supply chains in emerging markets may be less efficient due to
underdeveloped logistics infrastructure, political instability, or
environmental factors. Businesses may face challenges in ensuring timely
delivery of goods, managing inventory, or sourcing raw materials.
10. Intellectual Property Protection
In many emerging markets, intellectual property laws may be weak or
inadequately enforced.
11. Labor Market Challenges
While labor in emerging markets is often cheaper, companies may face
challenges in recruiting and retaining skilled workers. Labor laws and
regulations may also be complex or vary widely across regions, making
human resource management difficult.
12. Environmental and Sustainability Concerns
Emerging markets may face environmental challenges such as pollution,
deforestation, or resource depletion. Companies must navigate these
issues and may face pressure from both local governments and
international organizations to comply with sustainability standards.
Conclusion:
While emerging markets offer significant opportunities for growth and
expansion, businesses must be aware of the risks and challenges they
present. A thorough understanding of the political, economic, cultural,
and legal environments is essential for successfully navigating these
markets. Companies should be prepared for the complexities of operating
in such environments and develop strategies to mitigate risks and
maximize their chances of success.
Comparative advantage is the ability of a country to produce a good more
efficiently than other countries, but to produce that good more efficiently
than any other good. The concept was introduced by economist David
Ricardo to explain how trade can benefit all parties, even if one is less
efficient in producing all goods.
To use comparative advantage, entities should focus on producing
goods or services where they have the lowest opportunity cost and trade
for others. This allows for specialization and more efficient resource
allocation. For instance, if Country A can produce both wheat and cloth
but gives up fewer resources to produce wheat, while Country B
sacrifices less to produce cloth, they should specialize in these respective
goods and trade to maximize overall benefits.
The benefits of comparative advantage include higher overall
production, efficient resource utilization, economic growth, and increased
trade opportunities. It enables countries or entities to achieve gains from
trade by focusing on what they do best relative to others.
For example, India has a comparative advantage in providing IT
services due to its skilled workforce and lower labor costs, while the
United States has a comparative advantage in producing advanced
machinery and technology. By specializing and trading, both countries
can benefit economically and gain access to goods and services they
otherwise couldn't produce as efficiently.
Absolute advantage is the ability of a nation to produce a good more
efficiently than any other nation. A nation with an absolute advantage can
produce greater output of a good or service than other nations using the
same amount of, or fewer, resources. The concept, introduced by
economist Adam Smith, focuses on productivity and cost-efficiency in
production.
To use absolute advantage in practice,A country could concentrate
on producing the goods in which it holds an absolute advantage and then
trade with other nations to obtain the goods it needed but did not produce.
The benefits of absolute advantage include increased efficiency, higher
productivity, lower production costs, and enhanced global trade. It allows
countries or businesses to focus on their strengths while relying on others
to supply goods or services they produce less efficiently.
For instance, Saudi Arabia has an absolute advantage in producing
oil due to its abundant reserves and lower extraction costs. Meanwhile,
Japan excels in manufacturing cars due to advanced technology and
skilled labor. By specializing and trading these goods, both nations
benefit from better resource allocation and improved economic outcomes.
 Key criteria for assessing the attractiveness of emerging markets an
economies
When assessing the attractiveness of emerging markets and developing
economies (EMDEs), several key criteria are commonly used to evaluate their
potential for investment or market entry. These criteria include:
Positive
Economic Growth and Stability:
GDP Growth Rate: High and sustained growth rates indicate expanding
opportunities.
Economic Stability: Low inflation, stable currency, and manageable
public debt suggest a favorable business environment.
Market Size and Demographics
Population Size: Larger populations often provide bigger consumer
markets.
Income Levels: Growing middle-class populations and increasing
disposable income signal demand for goods and services.
Political and Regulatory Environment
Political Stability: A stable government reduces risks of disruptions.
Ease of Doing Business: Transparent regulations, investor-friendly
policies, and minimal red tape attract investments.
Infrastructure and Connectivity
Availability of transport, energy, and communication infrastructure
supports business operations.
Integration into global supply chains enhances export potential.
Access to Resources
Abundance of natural resources or raw materials can be a competitive
advantage.
Skilled labor force availability and cost competitiveness also play a role.
Market Openness and Trade Policies
Open trade policies, low tariffs, and free trade agreements improve market
access.
Foreign direct investment (FDI) incentives are additional draws for investors.
Technological Advancement
Adoption of technology, internet penetration, and innovation capabilities
drive modern business opportunities.
Competitive Environment
Market saturation, the presence of competitors, and industry dynamics
influence the level of opportunity.
Example:
India is attractive due to its large, young population, rapid economic growth,
and advancements in IT services. However, challenges like regulatory
complexity and infrastructure gaps must also be considered.
 Methods of promoting FDI in the host countries, che ví du
Promoting Foreign Direct Investment (FDI) in host countries
(investment-receiving countries) involves a combination of policies and
strategies designed to make the country more attractive to foreign
investors. The following methods are commonly used to encourage FDI:
Tax Incentives and Financial Benefits
Offering tax breaks, exemptions, or reduced corporate tax rates is one of
the most common methods used to attract FDI. These incentives may
include tax holidays, reduced VAT, or deductions on investment costs.
Example: Ireland has attracted significant FDI, particularly from tech
giants like Apple and Google, by offering low corporate tax rates (12.5%)
and other tax incentives.
Regulatory Reforms and Simplification
Simplifying business registration processes and reducing bureaucratic
hurdles can make a country more attractive to foreign investors.
Streamlining permits, licenses, and approval processes helps improve the
ease of doing business.
Example: In 2003, China implemented reforms to reduce red tape and
improve the efficiency of its business registration processes, significantly
boosting foreign investments.
Establishing Special Economic Zones (SEZs)
Special Economic Zones (SEZs) are areas where foreign businesses can
operate under more favorable economic conditions, including tax breaks,
customs duty exemptions, and relaxed regulations.
Example: India’s SEZs, such as the one in Gujarat, offer tax exemptions
and infrastructural support to attract both domestic and foreign investors
in sectors like manufacturing and IT.
Investment Promotion Agencies (IPAs)
Many countries have established IPAs that provide services to foreign
investors, such as market intelligence, project facilitation, and legal
advice. These agencies often act as intermediaries between foreign
investors and government authorities.
Example: Singapore’s Economic Development Board (EDB) actively
works to attract foreign investments through personalized services,
incentives, and providing a stable and transparent regulatory
environment.
Infrastructure Development
Ensuring that there is high-quality infrastructure, including transport,
energy, and telecommunications, makes a country more attractive for
foreign investment. Reliable infrastructure reduces the costs and risks for
investors.
Example: Vietnam’s ongoing infrastructure development, such as the
expansion of ports and industrial parks, has attracted significant FDI in
sectors like manufacturing and electronics.

Trade Agreements and Market Access

Signing Free Trade Agreements (FTAs) and being a member of regional
trade blocs can provide investors with access to larger markets and reduce
trade barriers, encouraging FDI.
Example: Mexico’s participation in the USMCA (formerly NAFTA) has
made it an attractive destination for FDI from companies seeking access
to the North American market.
Political and Economic Stability
Investors prefer countries with stable political environments and sound
economic policies. Ensuring the protection of property rights and a fair
legal system is essential for building investor confidence.
Example: The United Arab Emirates (UAE) has attracted considerable
FDI due to its stable political system, clear regulations, and favorable
investment laws, especially in sectors like real estate and finance.
Promotion of Innovation and Technology
Encouraging innovation and supporting technology-driven industries can
attract FDI, particularly in sectors like IT, pharmaceuticals, and
biotechnology.
Example: Israel has positioned itself as a global leader in technology
innovation and attracts significant FDI in high-tech sectors through
government incentives and investments in R&D.
By combining these methods, host countries can create a more favorable
environment for FDI, which can lead to job creation, technology transfer,
and overall economic growth.
 Roles of FDI for for invested countries (host country), cho ví du
Foreign Direct Investment (FDI) plays an important role in the economic
development of host countries (receiving countries). However, it has both
positive and negative roles.

Positive:

1. Capital Inflow and Economic Growth

FDI brings much-needed capital to developing or emerging economies,
which can be used to finance infrastructure projects, industrial
development, and other key sectors. This capital injection can help boost
overall economic growth and development.
Example: In China, FDI has been a significant factor in its rapid
economic growth. The country has attracted trillions of dollars in FDI,
particularly in manufacturing and technology sectors, contributing to its
emergence as a global economic powerhouse.
2. Job Creation
One of the most immediate benefits of FDI is the creation of jobs.
Foreign investors often establish businesses or factories that require a
local workforce, thus reducing unemployment and providing income
opportunities.
Example: In India, companies like Samsung and Foxconn have invested
in large manufacturing facilities, creating thousands of direct and indirect
jobs, particularly in regions like Uttar Pradesh and Tamil Nadu.
3. Technology Transfer and Innovation
FDI can bring advanced technologies, management practices, and
technical know-how that may not be available in the host country. This
transfer of knowledge helps increase the productivity of local industries
and can lead to innovation in various sectors.
Example: In Vietnam, FDI from companies like Intel and Samsung has
not only introduced advanced manufacturing techniques but has also
fostered local innovation in electronics and tech industries.
4. Improved Infrastructure
Foreign investors often bring expertise and capital for building or
improving infrastructure such as roads, ports, telecommunications, and
energy systems. This improves the business environment and the overall
quality of life in the host country.
Example: The construction of roads, airports, and seaports in the United
Arab Emirates, driven by foreign investment, has greatly enhanced its
status as a global business and tourism hub.
5. Export Growth and Integration into Global Value Chains
FDI helps host countries integrate into global supply chains, allowing
them to increase exports. Foreign companies often set up export-oriented
production units that boost the host country's trade and economic
integration with the global market.
Example: Mexico has become a key player in the global automotive
industry, attracting FDI from companies like General Motors and
Volkswagen. This has contributed to Mexico's growth as a major exporter
of cars and automotive parts, particularly to the U.S. market.
6. Promoting Sustainable Development
In recent years, FDI has also been directed towards sustainable industries,
such as renewable energy and environmentally friendly technologies.
This can help host countries transition to greener economies while
attracting modern investments.
Example: Costa Rica has attracted FDI in renewable energy, particularly
in geothermal and wind power, becoming a leader in sustainable energy
development in Central America.
Negative
Widen gap between regions, rural and urban,..
Low competitiveness of local companies => bankruptcy
Deficit of foreign currency due to benefit transfer to home country
 Methods of promoting FDI in the home countries, cho vi du
Promoting Foreign Direct Investment (FDI) in the home country (the
investing country) involves implementing policies and strategies that
encourage businesses to invest abroad. These efforts can help enhance the
country's global economic presence, create jobs, and generate returns
from foreign investments. The following are key methods that home
countries use to promote FDI:
Provide insurance for foreign investment risks:
· Governments can offer insurance to protect companies from risks like
political instability, expropriation, or regulatory changes when investing
abroad. This reduces concerns about unforeseen risks in unstable markets.
Grant loans for foreign investments:
· Governments may provide loans or financial support to help domestic
companies expand their investments abroad. These loans often come with
favorable terms compared to private financial institutions.
Offer tax incentives or negotiate special tax treaties:
· Countries may reduce taxes on profits earned abroad or negotiate
treaties to avoid double taxation. This makes foreign investments more
financially attractive.
·Apply political pressure to relax investment restrictions:
· Governments may use diplomatic influence to urge other nations to
ease restrictions on foreign investment, such as lowering tariffs or
regulations, making it easier for their companies to invest internationally.
Example: Japan's government actively promotes Japanese products
and companies through initiatives like the “Cool Japan” campaign,
helping Japanese firms expand internationally, particularly in the cultural,
automotive, and electronics sectors.
In summary, promoting FDI from the home country requires a
multifaceted approach, including financial support, legal protections,
infrastructure investment, and policies that encourage international
business expansion. By fostering a conducive environment for domestic
companies to invest abroad, home countries can enhance their global
economic standing and create wealth and jobs for their economies.