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L lag strategy Delaying the collection of foreign currency receivables if that currency is expected to appreciate, and delaying payables if that currency is expected to depreciate. late-mover advantage Benefits enjoyed by a company that is late to enter a new market, such as consumer familiarity with the product or knowledge gained about a market. law of one price In competitive markets free of transportation costs and barriers to trade, identical products sold in different countries must sell for the same price when their price is expressed in the same currency. lead market Market where products are first introduced. lead strategy Collecting foreign currency receivables early when a foreign currency is expected to depreciate, and paying foreign currency payables before they are due when a currency is expected to appreciate. lean production systems Flexible manufacturing technologies pioneered at Toyota and now used in much of the automobile industry. learning effects Cost savings from learning by doing. legal risk The likelihood that a trading partner will opportunistically break a contract or expropriate intellectual property rights. legal system System of rules that regulate behavior and the processes by which the laws of a country are enforced and through which redress of grievances is obtained. Leontief paradox The empirical finding that, in contrast to the predictions of the Heckscher-Ohlin theory, US exports are less capital intensive than US imports. letter of credit Issued by a bank, indicating that the bank will make payments under specific circumstances. licensing Occurs when a firm (the licensor) licenses the right to produce its product, use its production processes, or use its brand name or trademark to another firm (the licensee). In return for giving the licensee these rights, the licensor collects a royalty fee on every unit the licensee sells. local content requirement A requirement that some specific fraction of a good be produced domestically. location economies Cost advantages from performing a value creation activity at the optimal location for that activity. location-specific advantages Advantages that arise from using resource endowments or assets that are tied to a particular foreign location and that a firm finds valuable to combine with its own unique assets (such as the firm's technological, marketing, or management know-how). logistics The procurement and physical transmission of material through the supply chain, from suppliers to customers. |
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