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Chapter 1 - Chapter 1 Globalization Today Globalization and...

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Chapter 1 Globalization Today Globalization and anti-globalization -Globalization- the process of social political, economic, cultural, and technological integration among countries around the world -facilitated by technological advances in transnational communications, transport, and travel leading to increased levels of trade, capital flows, and migration -Off shoring- migration of jobs to low wage nations; pro of globalization -Anti-Globalization- beliefs include loosing American jobs, damaging third world country economies, growing trade deficits, slow wage growth; they think countries will eliminate all standards to attract MNCs to do business Global and Regional Integration 1. over the past half century succeeding round of global trade negotiations have resulted in dramatically reduced tariff and nontariff barriers among countries; a. WTO- global organization of countries that oversees rules and regulations for international trade and investment 2. Many countries have pursued their own agreements as a result of the WTO’s slowing down a. North American Free Trade Agreement- a free trade agreement between the US Canada and Mexico that has removed most barriers to trade and investment i. Elimination of tariffs as well as import quotas ii. Opening of government procurement markets to companies in the two other nations iii. An increase in the opportunity to make investments in each others country iv. An increase in the ease of travel between the two countries v. The removal of restrictions on agricultural, auto, and energy goods 3. The EU has become a unified market and a unified currency has been created 4. Japan and other Asian MNCs look to take over the huge underdeveloped markets in Asia over the years 5. central and eastern Europe/Russia are all targets for MNCS 6. Economic activity in Latin America is volatile but with the proposed CAFTA it may become stronger 7. Economic progress in less developed countries like India. India’s government has cut back the process for foreign investment and now MNCs are investing Trends in International Investment and Trade -80% of all international investments come from developed countries. -Investment- developed countries look for countries with economic growth potential where they can invest funds -Trade- trade has increased substantially, the percentage of world trade by the US, EU, and Japan have stayed relatively the same
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Chapter 2 Legal Environment Political Environment 1. China- complex and risky because the government tries to balance national, immediate needs with the challenge of a free market economy and globalization. -member of the WTO - It is selling off a lot of its government owned businesses in order to jumpstart its economy - Hard to do business in because government regulations, lack of qualified people, and the government uncertainty of what they want from MNCS 2. Europe- The EU is finding it difficult to establish a foothold of power and as a result international managers must remain alert as to how political changes may impact their business
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