Edexcel Business A Level Revision

Multinational Corporation (MNC) - is a business that is based or registered in one country but has outlets/affiliates or does business in other countries.  Such companies have offices and/or factories in different countries (typically emerging economies or undeveloped countries due to cost savings) and usually have a centralised head office (typically in western markets e.g. UK and US) where they coordinate global management. Balance of payments - A record of a country's trade/transactions with the rest of the world. A surplus is when the sum of exports of goods/services/investment income/transfers is greater than imports. A deficit is when the sum of exports of goods/services/investment income/transfers is less than imports. Foreign direct investment (FDI) - is an investment in a business by an investor from another country for which the foreign investor has control over the company purchased. Transfer pricing - Two companies that are part of the same MNC use interna...

Globalisation - the process of greater intergration and inter-connectedness between countries Trade liberalisation - Includes the removal or reduction of tariff obstacles such as duties and surcharges and non-tariff obstacles such as licensing rules, quotas and other requirements. Transnational Corporation - A business that is register and operates in more than one country at a time but selling the same products. Migration - The movement of people from one place to another International trade is increasing for a number of reasons: Reduction of international trade barriers/trade liberalisation Reduced cost of transport and communication Increased significance of transnational corporations Increased investment flows Migration within and between economies Growth of the global labour force Structural Change REDUCTION OF INTERNATIONAL TRADE BARRIERS/TRADE LIBERALISATION Countries impose trade barriers for many reasons. They include protecting local jobs, allowing new i...

Foreign Direct Investment - is investment made by a business or other entity from one country into the production capacity of a business or other entity from another country e.g. factories Inward FDI / Horizontal FDI - An investment into a country involving an external or foreign company either investing in or purchasing the goods of a local economy. Outward FDI / Vertical FDI - A business strategy in which a domestic firm expands its operations to a foreign country via an investment, merger/acquisition or expansion of an exisiting foreign facility. FDI can be used by businesses to achieve the aim of growth. Countries try to attract FDI using strategies such as lower levels of corporation tax, subsidies for the building of factories, and investment in infrastructure such as roads, ports and airports. It was originally believed that FDI occurred due to differing interest rates in different countries. Businesses would transfer money globally to where they could obtain the highest...

Foreign Direct Investment (FDI) - The transfer of funds by a foreign business to purchase and acquire physical capital,  such as factories and machines. TRADE OPPORTUNITIES Opens up new markets which increases wealth in countries such as China who want western brands British provenance (" the place of origin or earliest known history of something. "). For example, fashion, finance, cars, arts, education etc. Additionally, BRICS countries can help with supplying materials and resources to British companies to help their provenance. Access to raw materials Greater movement of goods and services between countries Opportunities for cheaper production and therefore cheaper unit costs Greater investment opportunities such as Foreign Direct Investment (FDI) Increased profits for businesses. Trade opportunities will arise in new markets leading to an increase in demand and increased revenue and profit. The owners of businesses will see and increase in income e.g. through hi...