The North American Free Trade Agreement (NAFTA) was a trade agreement signed by Canada, Mexico, and the United States, which came into effect on January 1, 1994. It aimed to eliminate barriers to trade and investment between the three countries, creating one of the world's largest free trade zones.
The term "Transnational" is often used to describe companies that have global operations, which include production, marketing, investment, and operations in multiple countries. Transnational companies have a highly integrated and coordinated approach to conducting business across borders. They often have a decentralized organizational structure, with decision-making authority distributed among various units in different countries. This allows them to adapt to local market conditions while maintaining a global presence and leveraging economies of scale and scope. Transnational companies are significant players in the global economy and are recognized for their ability to navigate complex international business environments.
Multinational companies have their headquarters in one country (the home country) and operate in multiple other countries (host countries) where they have subsidiaries, branches, or other business operations. They engage in cross-border trade, investment, and production, making them significant players in the global economy.
California, specifically the Los Angeles area, is a significant hub for the toy industry and has become a world-leading marketer of toys. Several major toy companies are headquartered in California, including Mattel (maker of Barbie and Hot Wheels) and Hasbro (maker of Transformers and My Little Pony), among others. The state's proximity to Hollywood and its entertainment industry has also contributed to its prominence in the toy market as many toys are tied to popular movies and TV shows.
Pro-globalists are individuals or groups who support and advocate for the process of globalization, but with an emphasis on promoting democratic principles, human rights, and social and environmental responsibility. They believe that globalization, when managed properly, can lead to positive outcomes such as economic growth, cultural exchange, and improved living standards while ensuring that these benefits are shared equitably and sustainably across societies.
Import-competing industries are domestic industries that produce goods or services that directly compete with imports from foreign countries. When a country opens up its markets to international trade, it allows foreign goods to enter, and domestic producers may face increased competition from lower-priced imports. As a result, some domestic companies in import-competing industries may struggle to compete and could experience short-term job losses as they adjust to the new competitive landscape.
A company that owns and operates manufacturing plants in at least two countries is known as a multinational company (MNC) or a multinational corporation (MNC). These companies have a significant presence and business operations in multiple countries, engaging in international trade, investment, and production. The term "multinational" indicates that the company operates in more than one nation and has a global reach.
A global corporation is a company that produces goods domestically or in one nation but focuses on marketing and selling those goods abroad in international markets. These corporations have a strong global presence and engage in cross-border trade and business activities. They often adapt their products and marketing strategies to suit the specific needs and preferences of consumers in different countries.
The Comparative Cost Trade Theory, also known as the theory of comparative advantage, is provided by the economist David Ricardo. He introduced this theory in his book "Principles of Political Economy and Taxation" published in 1817. As mentioned earlier, the theory explains the benefits of international trade based on the principle of comparative advantage, which suggests that countries can benefit from specialization and trade even if one country is more efficient in producing all goods than another country.
The cost of transporting goods is a crucial factor that shapes the configuration of global supply chains, influences the types of goods that are traded between countries, and determines the boundaries between goods that are internationally tradable and those that are not.
It is stated by Eli Heckscher and Bertil Ohlin in the Theory of Relative Factor Endowments, commonly known as the Heckscher-Ohlin model. This theory is a fundamental concept in international trade economics and explains the patterns of international trade based on the relative factor endowments (such as labor, capital, and natural resources) of different countries. The model suggests that countries will specialize in and export goods that use their abundant factors of production and import goods that require factors in which they are relatively scarce.
According to the economist David Ricardo, the principle of comparative cost advantage, also known as the theory of comparative advantage, explains the benefits of international trade between two countries. Ricardo introduced this concept in his 1817 book titled "Principles of Political Economy and Taxation."
MNC stands for "Multinational Corporation." It refers to a large corporation or company that operates in multiple countries and has a significant presence and business interests in various parts of the world. These corporations typically have headquarters in one country and subsidiaries, branches, or operations in several other countries. They often engage in international trade and investment, and their business activities can span various industries and sectors.
Complementary products, though relevant in the context of the business environment, are not explicitly included in the original Porter Five Forces model. The model focuses on the forces that directly impact the competitive environment of an industry and shape its attractiveness and profitability.
A letter of credit is a financial document issued by a bank on behalf of the buyer (importer) to the seller (exporter) as a guarantee of payment for goods or services. It assures the exporter that they will be reimbursed for the goods they sell abroad as long as they meet the terms and conditions specified in the letter of credit. This method provides a level of security and reduces the risk for both the exporter and the importer in cross-border transactions.
The initials OECD stand for the "Organization for Economic Co-operation and Development." The OECD is an international organization consisting of 38 member countries, with a mission to promote policies that improve economic and social well-being worldwide. It provides a platform for countries to discuss and collaborate on various economic and social issues, conduct research and analysis, and make policy recommendations to foster sustainable economic growth, development, and prosperity.
