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Modern communication, improved legal structure, favourable political environment, modern transportation has all opened markets to international finance and trade. International trade, therefore, influences many sectors of the economy both locally and globally. The main aim of…
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Download file to see previous pages say will establish businesses internationalisation and focus on the economic, environmental, political, and social impacts of business internationalisation. The content in the essay borrows from Economics, International Business, and Critical Political Economy.
The main aim of internationalisation is to maximise profits and formation of capital. Businesses set out to international platforms to harness the innovation and influence the price and quality of assets in other regions. Firms may also internationalise in order to present a strategic marketing alliance or technological front as compared to their competitors. Similarly, an enterprise may in its choice of location, be keen to find resources that reduce its direct costs and increase its assets base (Dunning, 2001, p.184). In the search for reduced costs of production, firms try to harness cheaper alternatives in order to maximise profit margins in a competitive market. Most times, the local market offers a high price for factors of production. With internalisation, prospects of cheaper factors of production set. At times, firms go global in order to meet their international demand. Export to foreign markets may affect their product demand due to increased shipping cost. Production at a subsidiary plant may increase returns for the parent company. The reason of internationalisation compares the advantages of the process to the business to the benefits and costs of accessing cross-border transactions (Dunning, 2001, p.187).
In Economics, demand adjusts supply and consumption influences production. Thus, Economics is a system that is responsive, elastic, and automatic (Coase, 1937, p.387). Economics tries to achieve this balance by focusing on the production process and its impact on the price. Firms are characterised by the price mechanism. In internationalisation, firms optimise production by sourcing cheap sources of factors of production such as labour. With the establishment of a foreign firm, it is ...Download file to see next pagesRead More
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