The paper "Weekly Preparation for International Business" is a great example of a Business Case Study. According to the World Investment Report (2015), indicate that global foreign direct investment increased by 36% in the year 2015. This increase in global foreign direct investment is attributed to cross-border mergers and acquisitions and corporate reconfigurations. UNCTAD also expects an increase in mergers and acquisitions. FDI has consistently been growing for the last ten years as a response to the liberalization of world economies. Foreign direct investment by individual private investors increased as they are targeting infrastructure internationally.
The manufacturing and automotive industries experienced an upward trend in foreign direct investment. FDI increase significantly in all regions, but the Eurozone experienced little FDI due to ongoing uncertainties in the region, increased economic and political risks, and persistent vulnerabilities. Foreign direct investment increased in developing countries as big firms have realized there are plenty of underutilized resources in developing nations. MNEs in developing countries expanded foreign investments through Greenfield operations and cross-border mergers and acquisitions. Large MNEs are continuing to acquire developed countries' affiliates in developing nations.
For instance, MMG South America Company Limited, which is based in Hong Kong, China acquired Xstrata Peru, which is an affiliate Glencore (Switzerland). Large MNEs in China, Hong Kong, and Singapore are targeting companies in the U. S, and the U. K. FDI from large MNEs accounted for over 40% of finance to develop and transition economies. Large MNEs engaged in divestments by increasing cross-border deal activities and expanding the proportion of their international assets. These MNEs have increased liquidity in the global private equity markets. Large MNEs are willing to spend a significant portion of their retained earnings in cross-border deal-making activities.
The internationalization of state-owned MNEs has declined for the past four years due to the global financial crisis. Week 2 China has engaged in 12 regional and bilateral trade agreements and had six agreements under negotiation and four agreements under consideration. It has participated in the Trans-Pacific Partnership negotiation with the other 12 Pacific countries and engaged in a bilateral agreement with large partners like the U. S and India. Several benefits have accrued the companies from the region.
Member states have eliminated, and reduced trade barriers and tariffs the companies in the countries with which China has formed agreements can freely move goods and services without facing trade restrictions, quotas or embargoes. Companies also incur low transaction costs as a result of the elimination and reduction of taxes. Companies have increased sales by selling their products both locally and internationally. Through free trade, the countries have transferred technology, and this has facilitated their growth. Despite the many benefits associated with the trade agreement, the companies in the regions that have entered into trade agreements.
Some countries have relied too much on imports for valuable goods, and this has resulted in the collapse of local industries. Developing countries that have entered into agreements with the nation have fallen victims of dumping of harmful products such as poisonous chemicals. China has advanced in technology and thus entering into an agreement with a nation in developing countries serves as a threat to the companies. The competition might be unhealthy in the industry, and thus, the local company might be forced to exit the industry since it cannot keep up with the pace of competition in the market.
As a result of this, local employees will be declared redundant and thus suffer the economic burden of unemployment.
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