Special interest groups such as labor unions and

Info icon This preview shows pages 24–32. Sign up to view the full content.

View Full Document Right Arrow Icon
Special interest groups such as labor unions and environmental advocates Local competing firms , which oppose foreign firms. 7-24
Image of page 24

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Country Risk Produced by Political Systems: Government Takeover of Corporate Assets Confiscation : Seizure of corporate assets without compensation. Expropriation : Asset seizure with compensation. Nationalization : Takeover of an entire industry, with or without compensation. Examples In Venezuela, President Hugo Chavez confiscated an oil field owned by the French petroleum firm Total. In Bolivia in 2006, the Bolivian government nationalized the oil and gas industry.
Image of page 25
Country Risk Produced by Political Systems: Creeping Expropriation The most common expropriation today. The government gradually modifies regulations and laws after foreign MNEs have made big local investments in property and plants. International Business: The New Realities 7-26 Examples Abrupt termination of contracts. Creation of laws that favor local firms. The governments in Bolivia, Russia, and Venezuela have modified tax regimes to extract revenues from coal, oil, and gas companies.
Image of page 26

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Country Risk Produced by Political Systems: Embargoes and Sanctions Governments may respond to offensive activities of foreign countries by imposing embargoes and sanctions Sanctions are bans on international trade, usually undertaken by a country, or a group of countries, against another judged to have jeopardized peace and security. Embargoes are bans on exports or imports that forbid trade in specific goods with specific countries. Example: The U.S. has enforced embargoes against Cuba, Iran, and North Korea, labeled as state sponsors of terrorism. International Business: The New Realities 7-27
Image of page 27
Country Risk Produced by Political Systems: Boycotts against Firms and Nations Voluntary refusal to engage in commercial dealings with a nation or a company International Business: The New Realities 7-28 Examples from France Citizens boycotted Disneyland Paris, to express opposition to globalization and takeover of French farmland French farmers boycotted McDonald’s, and crashed a tractor into a shop, to vent their anger with agricultural policies and globalization.
Image of page 28

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Country Risk Produced by Political Systems: Wars, Insurrection, and Violence War and insurrection – Indirect effects can be disastrous for company activities. Terrorism : the threat or actual use of force or violence to attain a political goal through fear and intimidation. Some terrorism is sponsored by national governments. Terrorism particularly affects certain industries – tourism, hospitality, aviation, finance, retailing. International Business: The New Realities 7-29
Image of page 29
Types of Country Risk Produced by Legal Systems Country risk arising from the host country legal environment: Foreign investment laws Controls on operating forms and practices Marketing and distribution laws Laws regarding income repatriation Environmental laws Contract laws Inadequate or underdeveloped legal systems Internet and e-commerce regulations International Business: The New Realities 7-30
Image of page 30

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Country Risk Arising from the Host Country Foreign investment laws affect FDI-based entry International Business: The New Realities 7-31 Examples Japan – The “large-scale retail store law” restricted foreigners from opening warehouse-style stores like Toys’R’Us, in favor of smaller Japanese retailers.
Image of page 31
Image of page 32
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern