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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

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