1. Introduction to International Business David J. Boggs, Ph.D.

2. Trade and FDI Exporting and Importing direct indirect Portfolio Investments Direct Investments wholly or partially owned acquisition or greenfield

3. 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

5. Other Direct Investment Notes Trade and direct investment may complement or substitute for the other. Knickerbocker’s “follow the leader” Graham’s “exchange of threats” Suppliers often follow buyers overseas Dunning’s OLI (“eclectic”) theory Direction of investments

6. 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