Chapter 9
Globalization and factors
Pull Factors
- sales growth
- needed resources
Push Factors
- Might need to compete with foreign competitors
- democracy
- reduced trade barriers
How firms globalize
- Merger and aquisition
- Joint venture
- FDI
- Licensing
- Franchising
MNC benefits and threats
Benefits
- encourage trade and economic development
- employment
- Financial support and new tech to the host country
- Global cooperation
Threats
- Profits may not be held in the host country
- No commitment to the host country
- Centralized decision making
- Holding accountable
Trade protectionism
import restrictions to protect domestic companies
regional economic intergration
- free trade: removal of tariffs and non-tariff barriers
- customs union: plus non-member tariff
- Common market: plus free flow of labour and capital
- Economic Union: plus economic policies among mombers