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Should Government assist business - Essay Example

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In United States, the government has constantly been engaged in providing assistance to small business to enable them to stand and work on their own. This assistance provided to small businesses,…
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Download file to see previous pages up tariff schemes and other import restrictions; assists in foreign operations; provides for a postal system; conducts and encourages research and development; pays out vast sums for goods, services, and transfer payments; and helps in maintaining a sound banking system (Isaacs & Slesinger, 1964, p. 10).
Therefore, the purpose of this essay is to illuminate the benefits of this assistance provided by the US government to business on economy and also about the burden it implies on the government and its policies and then come to a point to decide as to should government assist small businesses in their effort to be a part of internationalization by entering into export market.
Encouraging exports is a primary concern of most governments. In the United States, the Department of Commerce has many programs devoted to the development and nurturing of beginning exporters. Substantial resources are devoted to export promotion programs designed to increase the propensity of small companies to export.
However, while useful politically throwing monetary resources at a problem can be very wasteful. In the era of government budgetary problems and fiscal frugality, program accountability is part of every politician and administrators agenda. In the export promotions sector, the need to spend money wisely has emerged as a key concern.
Government assistance refers to the policies that a government puts forth to help the exporter conduct international business. Studies have shown that governments can either help or hinder the export process. Typically, they help by providing information, sale leads, tax incentives, insurance, and financing programs. Czinkota and Ricks (1981) and Reid (1984) found that government assistance could stimulate export activity by providing relevant information. Governments can also hinder export decisions via their foreign exchange rate policy. Bauerschmidt, Sullivan, and Gillespie (1985) found that a high U.S. dollar relative to foreign currency ...Download file to see next pagesRead More
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