国际商务

⏹Chapter 2 Economic Systems

⏹Countries have different political, economic, and legal system. All these

difference can and do have major implications for the practice of

international business. In this chapter we will focus on economic systems .

⏹We can identity three broad types of economic systems----a market economy,

a command economy, a mixed economy. Then we will discuss a market

transition economy.

⏹ 1.0 Economic systems

⏹ 1.1 Market economy

⏹In a pure market economy, all productive activities are privately owned, as

opposed to being owned by the state. The goods and services that a country produces are not planned by anyone.

⏹For a market to work in this manner there must be no restrictions on supply.

A restriction on supply occurs when a market is monopolized by a single firm.

⏹Given the dangers inherent in monopoly, the role of government in a market

economy is to encourage vigorous competition between private producers.

⏹ 1.2 Command Economy

⏹In a pure command economy, the goods and services that a country produces,

the quantity in which they are produced, and the prices at which they are

sold are all planned by the government. In addition, in a pure command

economy, all businesses are state owned.

⏹ 1.3 Mixed Economy

⏹In a mixed economy, certain sectors of the economy are left to private

ownership and free market mechanisms while other sectors have significant state ownership and government planning.

⏹ 2.0 Political Economy and Economic Progress

⏹Innovation and entrepreneurship are the engines of growth

⏹Innovation and entrepreneurship require a market economy

⏹Innovation and entrepreneurship require strong prperty rights

⏹Democratic regimes are more conducive to long-terms economic growth

⏹Economic progress begets democracy

⏹ 3.0 States in Transition

⏹from centrally planned and mixed economies toward a more free market

economic model

⏹The major market transition countries are Russia, the eastern European

nations, and China.

⏹ 3.1 A brief Historic Review

⏹ 3.2 The Demise of the Socialist System

⏹ 3.0 States in transtion

⏹ 3.3 The Realities of Economic Change

⏹ 3.3.1 Infrastructure shortages

⏹ 3.3.2 Capital Shortages

⏹ 3.3.3 Demands Conditions

⏹ 3.3.4 Knowledge Resources

⏹ 3.3.5 Uncertainty

⏹ 3.4 State Enterprises and Privatization

⏹ 3.4.1 Reasons for the Existence of State-Owned Enterprises

⏹National security and economic security

⏹The investment required is too large to come from private sector

⏹Rescue failing private enterprises

⏹The state-owned firms may be more societal oriented

⏹ 3.4 State Enterprises and Privatization

⏹ 3.4.2 The Effect of State-Owned Enterprises on International Business

⏹Market entry

⏹The sourcing or marketing process

⏹International competition

⏹ 3.4.3 Privatization

⏹Beginning in the mid-1980s governments and citizens came to recognize the

drawbacks

⏹Through privatization, governments can cut their budget costs and still

ensure services are provided to their citizens

⏹The methods of privatization vary form country to country

⏹ 4.0 The Role of the Multinational Firms

⏹Multinational firms have experienced higher rates of success in transition

economies for a variety of reasons;

⏹Foreign firms have had a tendency to enter-- at least initially – service sectors

that allowed high profit potential with minimal capital investments.

⏹The export orientation of the multinational firm is quite consistent with the

economic policy goals of the transition economies.

⏹Many multinationals find their access to local capital to be easier than of

other domestic borrowers.

⏹Chapter 3 Politics and Laws

⏹Politics and laws play a critical role in international business. Unexpected

political or legal influences can interrupt company’s plan and cause serious results.

⏹Political systems can be assessed according two dimensions: Collectivism and

Individualism; Democratic and Totalitarian.

⏹ 1.0 Home-Country Perspective

⏹ 1.1 Embargoes and Sanctions

⏹The terms of sanction and embargo refer to governmental actions that

distort free flow in goods, services, or ideas for decidedly adversarial and political, rather than economic purposes.

⏹Sanctions tend to consist of specific coercive trade measures such as the

cancellation of trade financing or the prohibition of high-technology trade.

Embargoes are usually much broader in that they prohibit trade entirely.

⏹ 1.2 Export Controls