view that claims phenomenon of globalization was initially driven by the desire of Western economies to exploit their power through MNE's ✔✔new view that claims globalization is a long-run historical evolution since the dawn of humanity. Says it is nothing new and that it will always exist ✔✔evolutionary view that claims globalization is swinging from one extreme to another from time to time ✔✔pendulum investment in, controlling, and managing value-added activities in other countries ✔✔foreign direct investment political view hostile to FDI. believes it is an instrument of imperialism and vehicle for exploitation of domestic resources by foreign capitalists and firms ✔✔radical suggests that FDI, unrestricted by government intervention, will enable countries to tap into their absolute or comparative advantages by specializing in the production of certain goods and services ✔✔free market views FDI as having pros and cons and only approving FDI when its benefits outweigh costs ✔✔pragmatic nationalis what benefits exist to a country receiving FDI? ✔✔capital inflow, technology spillovers, advanced management know-how, creates jobs what costs exist to a country receiving FDI? ✔✔loss of sovereignty, adverse effects on competition, net outflow in the capital account The aggregation of importing and exporting that leads to the country-level trade surplus or deficit. ✔✔balance of trade firms with a _____ degree of resource similarity are likely to have similar competitive actions ✔✔high a high degree of resource similarity but low market commonality = _______ intensity of rivalry ✔✔highest little resource similarity but high market commonality = _____ intensity of rivalry ✔✔lowest mercantilism, absolute advantage and comparative advantage belong to what theory of international trade ✔✔classical theory of international trade that relies on more realistic product life cycles and first mover advantages ✔✔modern under free trade, a nation gains by specializing in economic activities in which it has _____advantage ✔✔absolute focuses on the idea that if a country does not have absolute advantage, they can still choose to specialize in the production of one good where it has ______ advantage ✔✔comparative comparative advantage and absolute advantage stem from ✔✔factor endowments theory that the wealth of the world is fixed and that a nation that imports more and exports less will be richer ✔✔mercantilism stage of the product life cycle where production of a new product that commands a price premium will concentrate in the US ✔✔new stage of the product life cycle where demand and ability to produce grow in other developed nations ✔✔maturing stage of the product life cycle where the previously new product is commoditized and production will now move to low-cost developing nations ✔✔standardized comparative advantage may change over time because patterns of ______ change over time ✔✔trade theory that suggests that intervention by governments in certain industries can enhance their odds for international success ✔✔strategic trade if a company seeks to limit foreign exchange rate exposure in the forward direction, what is the most effective way to do this? ✔✔currency hedging exchange rate risk associating with the time delay between entering a contract and settling it ✔✔transaction risk forward transaction that protects traders and investors from exposure to fluctuations of the spot rate ✔✔hedging a means of spreading out activities in different currency zones in order to offset the currency losses in certain regions through gains in other regions ✔✔strategic heding amount of resources committed to entering a foreign market ✔✔scale of entry