Gitlab variable use in dockerfile

The person who setup our Gitlab for use creating docker images has left the company. I am trying to understand some of the configuration he was using. Under a folder for a specific app he would create the dockerfile. The dockerfile builds from a base image. To control which version of this image to build from, he would reference from another file stored in the folder with the dockerfile. This file is named Within this file a variable is set, VENDOR_TAG=8.0.53 as an example. The VENDOR_TAG is referenced from the dockerfile. Question, is a “” file a standard thing within Git? Is VENDOR_TAG a defined variable name within Git? How does this dockerfile know to look in and use VENDOR_TAG as a variable? And lastly, and most important, is it possible to create a variable in a parent folder and use it for all docker apps in subordinate folders?