Chapter 3 Flashcards
Describe the four different types of legal systems with which international businesses must deal
Among the main groups that you might encounter are:
1) common law;
2) civil law;
3) religious law;
4) customary law.
Many countries employ more than one of these systems at the same time to create a hybrid system.
what is extraterritoriality
Extraterritoriality. Living in a section of a country set aside for foreigners but not subject to the host country’s laws.
how can MNC affect its host country?
MNCs add to the host country GDP through their spending, for example with local suppliers and through capital investment. Competition from MNCs acts as an incentive to domestic firms in the host country to improve their competitiveness, perhaps by raising quality and/or efficiency.
how can MNC affect its host country?
MNCs add to the host country GDP through their spending, for example with local suppliers and through capital investment. Competition from MNCs acts as an incentive to domestic firms in the host country to improve their competitiveness, perhaps by raising quality and/or efficiency
how do expropriation and confiscation difference
is that confiscate is to use one’s authority to lay claim to and separate a possession from its holder while expropriate is to deprive a person of their private property for public use.
Why do countries impose restrictions on foreign ownership of domestic firms?
Often suggested reasons for foreign ownership restrictions are that host country governments use them to increase economic rents and to maintain local control of resources.
How do restrictions on repatriation of profits affect MNCs?
It effects exponentially not being able to bring the earned profits to the home country of the MNCs. but it benefits the host country because those profits would stay in that country
Why do firms engage in technology transfer?
From a business perspective, companies engage in technology transfer for a number of reasons: Companies look to transfer technologies from other organizations because it may be cheaper, faster, and easier to develop products or processes based on a technology someone else has invented rather than to start from scratch.
Why do firms engage in technology transfer?
From a business perspective, companies engage in technology transfer for a number of reasons: Companies look to transfer technologies from other organizations because it may be cheaper, faster, and easier to develop products or processes based on a technology someone else has invented rather than to start from scratch.
What is political risk?
Political risk analysis aims to provide insight into areas of the political process in which a business needs to intervene if it wants to change the business environment, mitigate its potential risks, or maximize its opportunities.
What forms can political risk take?
These include taxes, spending, regulation, currency valuation, trade tariffs, labor laws such as the minimum wage, and environmental regulations. The laws, even if just proposed, can have an impact.
