ch4 notes - International Business Chapter Four The...

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1 International Business Chapter Four The Economic Environment 2 Chapter Objectives To appreciate the importance of the economic analysis of foreign markets To identify the major dimensions of international economic analysis To compare and contrast the economic indicators of countries To profile the characteristics of the types of economic systems To discuss the idea of economic freedom To profile the idea, drivers, and constraints of economic transition 3 Introduction All countries differ in terms of: -levels of economic development -economic performance -economic potential A firm’s managers must understand the economic environments of those countries in which it operates, as well as those of countries in which it does not, in order to predict how trends and events the world over will likely affect firm performance.
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2 4 Key Economic Forces The general economic framework of a country Its degree of economic stability The existence and role of capital markets The presence of factor endowments Market size The existence of economic infrastructure 5 Factor Conditions Factor conditions: a nation’s inputs into the production process, such as human, physical, knowledge, and capital resources and infrastructure Not only is it difficult to specify a definitive set of economic indicators that precisely assess the performance and potential of a nation’s economy, but it is also difficult to understand the systematic relationship of one variable to another. 6 Fig. 4.1. Physical and Societal Influences on International Business
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3 7 Gross National Income Gross national income (GNI): the market value of all final goods and services produced by a country’s domestically- owned firms in a given year ECONOMIES RANKED BY 2003 GNI [$US MILLIONS] 1. United States 11,012,597 9. Spain 700,475 2. Japan 4,360,824 10. Mexico 637,159 3. Germany 2,085,464 11. South Korea 576,426 4. United Kingdom 1,680,069 12. India 570,760 5. France 1,521,613 13. Brazil 479,515
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This note was uploaded on 04/23/2008 for the course BUSA 3000 taught by Professor Beach during the Spring '08 term at Georgia State.

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ch4 notes - International Business Chapter Four The...

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