tailieunhanh - Ebook Essential economics for business: Part 2

(BQ) Part 2 book "Essential economics for business" has contents: Multinational corporations and business strategy in a global economy, labour and employment, government, the firm and the market, the economy and business activity, national macroeconomic policy, the global trading environment, the global financial environment. | Chapter 7 Multinational corporations and business strategy in a global economy Business issues covered in this chapter ■ ■ ■ ■ ■ ■ ■ ■ ■ What is the magnitude and pattern of global foreign direct investment and how has it changed? What are the key factors that make a nation attractive to foreign investors? What forms do multinational corporations take? Why do companies become multinational? In what ways do multinationals have a cost advantage over companies based in a single country? What competitive advantages do multinationals have over companies based in a single country? What disadvantages are companies likely to face from having their operations spread over a number of countries? What are the advantages and disadvantages of multinational investment for the host state? How can the multinational use its position to gain the best deal from the host state? The world economy has become increasingly interdependent over the past few decades, with improved communications and an increasingly global financial system. This has meant that in many respects a firm’s global strategy is simply an extension of its strategy within its own domestic market. However, opening up to global markets can provide an obvious means for a business to expand its markets and spread its risks, especially with the process of globalisation. It also is a means of reducing costs, whether through economies of scale or from accessing cheap sources of supply or low-wage production facilities. A firm’s global growth strategy may involve simply exporting or opening up factories or outlets abroad, or it may involve merging with businesses in other countries or forming strategic alliances. As barriers to trade and the international flow of capital have come down, so more and more businesses have sought to become multinational. The result is that the global business environment has tended to become more and more competitive. For developing economies, such as India and

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