International Business: Key Concepts and Terminology

International Business Terminology

Certificate of Origin

A certificate of origin (CO) is a document that certifies the country of origin of goods being shipped. It is required by customs authorities of the importing country.

Intellectual Property

Intellectual property (IP) refers to legal rights that result from intellectual activity in various fields. Common forms of IP include patents, trademarks, copyrights, and trade secrets.

Transfer of Technology

The sharing of scientific information, technology, and manufacturing know-how between firms, universities, or other institutions is known as the transfer of technology.

Franchising

In franchising, a franchisee is allowed to use a trade name or trademark in offering goods or services to the public in return for a royalty or other fee structure.

Foreign Direct Investment

Foreign direct investment (FDI) refers to the ownership and operation or effective control of productive assets of a business by an investor from another country.

Foreign Branch

A foreign branch is a business presence by an investor in a host country. It may be a branch office or an entire network of operational facilities.

Foreign Subsidiary

A foreign subsidiary is a company organized under the laws of a foreign host country but owned and controlled by a parent corporation in the home country.

Affiliates

Several subsidiaries owned by one parent are called affiliates.

Joint Venture

A joint venture is a cooperative business arrangement between two or more companies for profit.

Local Participation

Local participation means that a share of the business is owned by nationals of the host country.

Tariff

A tariff is an import duty or tax imposed on goods entering a nation's customs territory.

Nontariff Barriers

Nontariff barriers are all barriers to the import of foreign goods or services other than tariffs.

Quota

A quota is a quantitative restriction on imports that limits the quantity of an item that may enter a country annually.

Currency Risk

Currency risk includes exchange rate risk and currency control risk.

Public International Law

Public international law governs the conduct of nations with other nations or their relationships with individuals.

Private International Law

Private international law governs the rights and responsibilities of private individuals or corporations operating in an international environment, such as international sales contracts or shipping.

Treaty

A treaty is a legally binding agreement between two or more nations that is recognized and given effect under international law.

Convention

A convention is a multilateral treaty on a topic of broad international concern.

International Court of Justice

The International Court of Justice hears cases brought by nations against other nations. Individuals and private corporations are not parties to cases before the court. It has jurisdiction over cases involving treaties, conventions, international obligations, or questions of international law. Jurisdiction is not compulsory; each nation must agree to submit to the court's jurisdiction.