THE POLITICAL ECONOMY OF
Instruments of Trade Policy
Voluntary Export Restraints
Local content requirements
Tariff is a tax levied on impo
THE WORLD TRADING
SYSTEM AND REGIONAL
- Regional economic integration: refers to
agreements among countries in a geographic
region to reduce and remove tariff and nontariff
barriers to the free flow of goods, services and
factors of p
What is Globalization
refers to the shift toward a more integrated
and interdependent world economy.
barriers are tumbling
perceived distance is shrinking caused by
the advances in transportation and
national economies are mer
ENTRY STRATEGY AND STRATEGIC
Basic Entry Decisions
a) Which markets to enter
- Must be based on an assessment of a
nations long-run profit potential.
- Attractiveness of a country depends on
balancing the benefits, costs and risks
FOREIGN DIRECT INVESTMENT
FDI: occurs when a firm invests directly in facilities to
produce and/or market a product in a foreign
Once a firm undertake FDI, it becomes a
multinational enterprise (more than one country).
FDI takes 2 main forms:
DIFFERENCES IN CULTURE
Cross-cultural literacy: an understanding of
how cultural differences across and within
nations can affect the way in which business
What is Culture?
Culture: a system of values and norms
that are shared among a group
THE STRATEGY OF
Strategy and the Firm
Strategy the actions that managers take to
attain the goals of the firm.
Goal: to maximize long-term profitability.
Profit if revenues>costs.
2 conditions determine a firms p
An Overview of Trade Theory
- Free trade: a situation where a government
does not attempt to influence through quotas
or duties what its citizens can buy from
another country, or what they can produce
and sell to another country
NATIONAL DIFFERENCES IN
The economic and legal systems of a country are
shaped by its political system.
Political system the system of government in a
Can be assessed according to 2 related
GLOBAL MANUFACTURING &
Issues rise when trade barriers fall and global
Where in the world should manufacturing
activities be located?
What should be the long-term strategic role of
foreign production sites?