Question

Briefly define the following terms/phrases.

1. Transnationality Index (TNI)
2. Geographic Spread Index (GSI)
3. The Smiley curve of a production chain
4. The product life cycle theory
5. Offshore-outsourcing

Answer 1

Answer:
Transnationality Index (TNI):
It is a way to rank multinational corporations which is employed by economists and politicians.
It is calculated as arithmetic mean of following three ratios:

• ratio of foreign assets to total assets
• ratio of foreign sales by total sales
• ratio of foreign employment to total employment

Geographic Spread Index (GSI):
The geographic Spread index (GSI) is calculated as the square root of Internationalization index multiplied by numnber of host countries present.

The Smiley curve of a production chain
In a business management theory, the smiley curve is defined as how the value addition varies across different stages of bringing a product to the market in an IT related manufacturing industry.

The product life cycle theory:
This is an economic theory that was developed by Raymond Vernon. This theory was used to explain the observed pattern of international trade. Product life cycle has five primary stages as mentioned below:

• Development
• Introduction
• Growth
• Maturity
• Decline

Offshore-outsourcing:
It is a strategic practice in which a business hires a third party in another country to perform the work on behalf of them which would be more economical and selling the finish goods and services to the current nation.

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