...will also explain which country would be best to begin a business in. International Financial Markets Introduction Acme is planning on having a greenfield production facility overseas. The two foreign countries that I have decided to compare for starting business in is the United Kingdom, which is part of the European Union and Hong Kong. Hong Kong is not part of the European Union. I will first analyze the UK and then Hong Kong. Analysis of the United Kingdom (UK): The United Kingdom of Great Britain and Northern Irelane is a state that consists of the nations of England, Scotland, Wales, and Northern Ireland. This is also under the UK sovereignty and is not apart of the UK itself, however are the “Crown dependencies of the Channel Island and the Isle of Man.” The said dependencies seek their own policies over taxes, employment, education, and health. They are subjected to UK control on matters such as defense (Doing Business in the UK, 2005). The UK has an island of 242,500km2. The UK’s population in 2002 was 59.2 million and in 2006 the population was 60.6 million. The languages spoken in the UK is English, Welsh, Scots, and Gaelic. English takes up 83.6% of the ethnicity in the UK and the highest religious studied is Christian, which takes up 71.6% of the UK religious. The UK is one of the four largest economies in Europe (United Kingdom, 2007). The UK joined the European Union (EU) in 1973. The EU is a trading area which has no internal...
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...semi-presidential system in which the president and prime minister are both active participants in the day-to-day administration of the state. When the president and prime minister come from opposing parties, the president is responsible for foreign policy and the prime minister is responsible for domestic policy. France is also different from most major democracies as it uses a two round single winner voting system, rather than the one round system, which is the system used in the United States and the United Kingdom. Like France, India also has both a prime minister and a president. India is a union of states. It is officially classified as a Sovereign, Socialist, Democratic Republic with a parliamentary system of government. The Republic is governed in terms of the Constitution of India. The Constitutional head of the executive of the union is the President. The Council of the Parliament of the Union consists of the President and two Houses known as the Council of States and the...
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...THE EUROPEAN UNION CURRENCY: THE EURO ACCOUTING I The euro, in application of the Maastricht Treaty, entered circulation on January 1 2002. It is the official currency of 16 of the 27 member states of the European Union (EU). That union is made of Austria, Belgium, Cyprus, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Malta, The Netherlands, Portugal, Slovakia, Slovenia and Spain. The euro has become the second largest reserve currency and the second most traded currency after the U.S dollar (wikipedia). The creation of a single currency born out of a political concern turned out to be a good and strong monetary decision. According to the European Commission (website) the euro has provided many advantages and benefits over the previous situations where each member state had its own currency. Not only are fluctuations risks and exchange cost eliminated and the single market strengthened, but the euro also means a closer cooperation among member. Others assets are more choices and stable prices for consumers and citizen, a greater security and more opportunity for business and markets, an improved economic stability and growth, more integrated financial markets and a tangible sign of an European identity, a stronger presence for the E.U in the global economy making the euro a rival for the dollar. With all those benefits the euro is not without its critics. They were those who feared a lost of national identity because they had to relinquished their...
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...“Will the European Union Abandoned the Euro and Go back to their own Currency?” Professor: Dr. Mague Managing in a Global Environment MG615 Winter 2011 In today’s economy there are many different countries using different currencies. The European currency is defined as the forerunner of the Euro. This was a stable means of exchange between the former national currencies as they prepared to give way to the single currency. There are only some countries in Europe who adopted the Euro which are; Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain. The countries who did not adopted the Euro are; Denmark, Sweden and the United Kingdom. This is because they fear adopting the Euro would devastate their economy. Adopting the Euro gave the country a new start and others though it was a investment disaster. There have been many problems in adopting the Euro and people question whether or not the European Union will abandon the Euro. In reading many articles the countries using Euro zone are going through different forms of an economic crisis. According to the Bloomberg report the Euro zone fluctuates by increasing or decreasing in value. The euro zone had a weekly loss against the dollar after Portugal’s credit cut leaving European leaders ready to discuss the region’s debt crisis. The European officials will try to control a sovereign-debt crisis. As reported in the Bloomberg report, European Union leaders in Brussels...
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...Conceptualizing a business Roneika Stewart BUS/475 October 18, 2011 Kwadwo Ofori-Brobbery Conceptualizing a Business The Union Pacific Railroads is one of the most leading transportation companies across the United States. The railroad provides service in Mexico. The railroad covers 23 states in the western two-thirds of the country and serves many of the fastest growing U.S population and providing a safe mode of freight transportation (Union Pacific, 2011). Union Pacific franchise provides strong pricing opportunity, dependable service, and shareholders with higher return. This paper defines the Union Pacific Railroad service, states the company’s mission statement, values, and address customer needs. Mission Statement According to Union Pacific Railroad (2011), “Men and women are dedicated to serve, the Union pacific works together for the good of our customers, shareholders, and one another; our commitment defines us and drives the economic strengths of our company and our country. Union Pacific’s vision represents the experience for people who the company inspired. The vision also connects the importance of rail transportation to America’s economy, acknowledge the generation prior to us and promise for the generation that will follow. ” The Union Pacific strives to build America. The Union Pacific Railroad transport freight across the western part of the United States by rail. The railroad service has been in high demand for many years and years to follow. Therefore...
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...Tutor Date of Submission Table of Contents Introduction 4 Abstract 4 Advantages 5 a) Single Large Market 5 b) Excellent Infrastructure 6 c) Technology 6 d) Skilled and Trained Manpower 6 e) Regional Political Stability 6 f) Business Friendly Environment 7 Disadvantages 7 a) Sovereign Debt Crisis 7 b) The Use of a Single Currency 7 c) Germany Dominance 8 d) Alternative Option 8 Advantages of Acquiring a Foreign Business 8 a) High Growth of GDP 8 b) Available Large Markets 9 c) Favorable Government Policies 9 Disadvantages of Acquiring a Foreign Business 9 i. Different Business Environment 9 ii. Ineffective Regulatory Environment 9 iii. Unbalanced Economies 10 Reasons to Invest In a Foreign Market 10 i. Economic conditions 10 ii. Expectations on Exchange Rate 10 iii. International Diversification 10 Reasons to Provide Credit in Foreign Markets 10 i. High Interest Rates 11 ii. Expectations on Interest Rates 11 iii. International Diversification 11 Conclusion 11 References 12 Introduction The acquisition of business enterprise in a foreign country is part of global diversification. For instance, A US firm can seek to acquire another firm in Europe in which the business environment surrounding the foreign firm corresponds to the environment in the local US firm. The European market in the 28 different countries is diversified and incorporated with opportunities, regulations and transparent policies. In addition...
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...According Balassa (1962) there are five stages of economic integration: the free trade area, the customs union, the common market, the economic junction and the complete economic integration. The European Union is on the penultimate stage, which is the economic union. The objective of this essay is to know more about the European monetary union and other touch points that are to be the EMU, the process, countries belonging to the European Union but not part of the EMU and its reasons. Economic union is a common market that removes restrictions on trade between countries. The currency is the same and a central authority controls fiscal policies. It has a single currency and monetary policy. The objective of this stage is that members actually are formed as one nation and its features are a common fiscal common currency, harmonized tax rates, the pooling of foreign exchange reserves, and monetary policy. (Cerdeira, 2009) The EMU is a major step in the integration of the economy of the European Union. It involves the coordination of economic and fiscal policy of the same coin policies, some countries took the next step to the next stage and adopted the euro as its currency, and these countries are part of the euro area. (EC, 2014) " One Market, One Currency " is what the European Commission defined as a geographical area where the economy is a single currency and where risks can be managed and has flexibility among country. This would make cuts of a country being adversely...
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...Global Business Management Foreign Direct Investment Terms to Know: 1. Foreign Direct Investment An investment made by a company or entity based in one country, into a company or entity based in another country. Foreign direct investments differ substantially from indirect investments such as portfolio flows, wherein overseas institutions invest in equities listed on a nation's stock exchange. 2. Greenfield Investments Refers where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up. In addition to building new facilities, most parent companies also create new long-term jobs in the foreign country by hiring new employees. 3. Acquisitions and Merger A general term used to refer to the consolidation of companies. A merger is a combination of two companies to form a new company, while an acquisition is the purchase of one company by another in which no new company is formed. 4. Gross fixed capital formation Includes spending on land improvements (fences, ditches, drains, and so on); plant, machinery, and equipment purchases; the construction of roads, railways, private residential dwellings, and commercial and industrial buildings. 5. Exporting In International Trade, "exports" refers to selling goods and services produced in the home country to other markets. Export of commercial quantities of goods normally requires involvement of the customs authorities in both the...
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...between several states (such as the North American Free Trade Agreement (NAFTA) or part of a regional organization (such as the European Union). Depending on the level of economic integration, trade blocs can fall into different categories, such as free trade areas, customs unions, common markets, economic and political unions. In a free trade area, barriers to trade between members’ countries are removed, but each country determines its own external trade policy. Centralizing production in those locations within the area where the mix of factors costs and skills is optimal being practice. In a custom union, internal barriers to trade are removed and a common external trade policy is adopted. A common market is similar to a customs union, except that a common market also allows factors of production to move freely between countries. An economic union involves even closer integration, including the establishment of common currency and the harmonization of tax rates. A political union is the logical culmination of attempts to achieve even closer integration. EU formally removed many barriers to doing business across border within the EU in attempt to create a single market. The member states of EU have launched a single currency, the euro, which will reduce exchange cost and currency fluctuation risk, and they are moving closer political union. Canada, Mexico and the United...
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...CHAPTER 1—INTRODUCTION TO INTERNATIONAL BUSINESS TRUE/FALSE 1. Customs brokers are government inspection officials who regulate the shipment of goods in and out of the country. ANS: F PTS: 1 2. Global sourcing is the term commonly used to describe the process by which a firm attempts to locate and purchase goods or services on a worldwide basis. ANS: T PTS: 1 3. Nontariff barriers have a significant influence on how firms make their trade and investment decisions. ANS: T PTS: 1 4. The U.S.'s largest trading partner is Canada. ANS: T PTS: 1 5. Small and medium-size companies have little to contribute to the international marketplace. ANS: F PTS: 1 6. The U.S. has maintained a trade surplus in services. ANS: T PTS: 1 7. Because they tend to be more insidious, nontariff barriers are generally a greater barrier to trade than are tariff barriers. ANS: T PTS: 1 8. Intellectual property rights are valuable assets that can be licensed for use to others through a document collection international sales contract. ANS: F PTS: 1 9. Trade consists of the import and export of goods or services. ANS: T PTS: 1 10. Exporting is the shipment of goods or rendering of services to a foreign buyer located in a foreign country. ANS: T PTS: 1 11. The three forms of international business are exporting, importing, and licensing. ANS: F PTS: 1 12. Comparative advantage exists if the costs of production and price received...
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...needs to be well developed transportation and communication systems in place to enable free flow of goods and services with the member states. A common language of communication will also need to be agreed upon to ensure ease in business transactions. The process will be completed with the following stages put in place: The member states need enter in preferred trade agreements that will allow free trade without any trade restriction or lowered tarriffs within the economy, with each country retaining its own tariffs and quota system on trade with third parties. Custom Union There will need to be harmonized common external tariffs to allow an equal competitive play ground when doing business with third parties to the member states. Common Market The member states should allow free factors of production mobility within the common market, common language, shared culture to fcilitate business practices. Within the member states, tax rates may differ, those economies with low tax rates will receive more Foreign Direct Investments Economic Union –0202527174…072271431 There needs to be a common currency, common tax rates, common monetary and fiscal policy so that the economy can uniformly gain form the standard currency Political Union. In cases where the economy has grown strong, a common government can be put in place eg the sovereign government that will have one leader to shadow the...
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...UNIT 40 INVESTIGATING INTERNATIONAL BUSINESS BTEC NATIONAL INTRODUCTION. The international nature of business is evident to anyone who, for example, buys an iPod from Apple or insurance from Aviva. Many brand names are recognised throughout the world as organisations increase demand for their products by expanding from a national to an international market. Initially, the nature of the international business environment will be considered by looking at the size and importance of international markets. Governments encourage businesses to trade internationally but protectionism is also common. International business is regulated not just by national governments but also by transnational trading arrangements promoted by trading blocs such as the European Union and global agencies such as the World Trade Organization (WTO). Both large and small businesses trade internationally but doing business internationally is often more complex than doing business in the home market. Consideration will be given to the issues facing a domestic (UK) business when it expands its operations into the international sphere. However, some insights can be made by considering issues faced by overseas businesses as they have expanded their operations by moving into the UK market. Tesco has had very limited success in extending operations into France and Carrefour has had similar problems in establishing operations in the UK. However, they both have had more success in Malaysia and...
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...Week 1: The European Union, or EU, is an economic and political partnership between 27 European countries. Created after the Second World War, the partnership was to bring economic cooperation through trade and avoid conflict. The European Economic Community, or EEC, was created in 1958 which brought economic cooperation and a single market. The economic union developed into an organization spanning policy areas. The EEC changed names in 1993 to the EU. The EU bases its rules on a law that states everything it does has to be founded through treaties, voluntarily and democratically agreed by all member countries (How the EU works, 2013). By seeking to acquire a company in the EU, one would benefit from this union because it allows everyone within these countries to work and move freely within the countries and use a single form of currency, the euro, which saves the company from transactions costs. It will allow the company to expand its market. The advantages of expanding into the EU are the single form of currency, saving transaction fees, and the expansion of the company's market. The disadvantages of expanding into the EU are the different cultures, customs, and languages of each country will vary, causing some people to become unaware when they are conducting business what is being said, what should be done, and how to conduct themselves. The best way to overcome this is to hire local translators in each country who can help conduct the business meetings with the locals...
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...Regional integration can be described as the union of a geological area, the main theme running through the efforts is that of cooperation. Hence regional integration is the interaction and cooperation of various countries in a specific region working together in order to foster their own well being, the idea of integration suggests unity and teamwork. On the other hand, regional integration also refers to an outcome, occurring when pre set criteria are met. Regional integration involves some compromise on the part of nation states, but should enhance the general quality of life for the citizens of those states. Regional integration can be described as a dynamic process that entails a country’s willingness to share or unify into a larger whole. The degree to which it shares and what it shares determines the level of integration. Exploration of the factors promoting regional integration within the Caribbean * Common language - The language of the Caribbean people is English, and this facilitates easy communication. * Close Proximity - The Caribbean countries are relatively close to each other, hence, travel by air or sea from one country to another can be done in a relatively short space of time. * Caribbean countries share a common history - Most of the Caribbean people are descendants of people who had been subjected to slavery and indentureship. This makes it possible for the Caribbean people to embrace each other. * Common Cultural Heritage - The Caribbean...
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...their respective advantages and disadvantages; along with the circumstances surrounding their emergence and failure. Through this lens the author intends to draw comparisons between the current EMU and the Gold Standard and any implications these similarities have Introduction A prerequisite to any discussion on this topic is an understanding of certain classical and neo-classical analytical frameworks. Therefore section one will briefly present and explain the logic of Hume’s Mechanism and the ‘Impossible Trinity.’ Section Two outlines a chronological history of various exchange rate mechanisms along with their corresponding successes and failures. Section three draws parallels between the Gold Standard and the European Monetary Union and discusses the consequences of these similarities. Section One: Analytical Frameworks Hume’s Mechanism: This theory combines aspects of the purchasing power parity and interest rate parity conditions. It states that as the monetary base (M) increases domestic prices trend upwards. This induces a nation to import more goods than it exports, creating a current account deficit. This deficit gradually causes gold to leave the system, causing prices to revert back to their original levels- producing a balanced current account. This process in the goods markets is far slower than the complimentary process which occurs in the financial markets. When the money stock within the system exceeds its equilibrium level interest rates are...
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