Page 32 - Volume 2_CHANGES_merged_with links

Some Key Terms

Changes!

Horizontal
a business expands its domestic operations to a foreign country. In this case, the

business conducts the same activities but in a foreign country.

Vertical
a business expands into a foreign country by moving to a different level of the supply

chain. In other words, a firm conducts different activities abroad but these activities are
still related to the main business.

"Foreign Direct Investment (FDI) - Overview, Benefits & Disadvantages."
Corporate Finance Institute.

Fractionalization 36
Fractionalization is the probability that two individuals drawn randomly from the

country's groups are not from the same group (ethnic, religious, or whatever the criterion
is). The following are fractionalization scores for African countries produced in 2003 and

based on ethnicity, religious and linguistic data directly from the Encyclopædia Britannica
lists.

***
Ethnic fractionalization is approximated by a measure of similarity between languages, varying
from 1 = the population speaks two or more unrelated languages to 0 = the entire population
speaks the same language.

Source : Encyclopædia Britannica

Fragile States 37
A fragile state or weak state is a country characterized by weak state capacity or weak

state legitimacy leaving citizens vulnerable to a range of shocks. The World Bank, for
example, deems a country to be 'fragile' if it :

(a) is eligible for assistance (i.e., a grant) from the International Development

Association (IDA)

(b) has had a UN peacekeeping mission in the last three years, and

(c) has received a 'governance' score of less than 3.2 (as per the Country Policy and

Institutional Assessment (CPIA) index of The World Bank).

"Fragile State"
Wikipedia