Introduction to International Business

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Introduction to International Business

• David J. Boggs, Ph.D.

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Trade and FDI

• Exporting and Importing
• direct
• indirect
• Portfolio Investments
• Direct Investments
• wholly or partially owned
• acquisition or greenfield

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Mode of Entry Issues

• Control
• Risk
• Political and legal pressure
• Resources
• Market knowledge
• Trade restrictions
• Corporate strategy

• Scale economies
• Transportation costs
• Country of origin preference
• Production rationalization
• Access to technology
• Diversification

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Other Direct Investment Notes

• Trade and direct investment may complement or
  substitute for the other.
• Knickerbockers follow the leader
• Grahams exchange of threats
• Suppliers often follow buyers overseas
• Dunnings OLI (eclectic) theory
• Direction of investments

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Class Activity

• What type of foreign presence would you expect
  for
• Boeing in China in Malaysia
• Anheuser-Busch in Australia
• Ford Motor company in Europe
• Pizza Hut in Brazil
• TWA in Europe
• Arthur Anderson Consulting in Canada
• The Gap in Indonesia