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Multinational Corporation Expansion - Essay Example

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The organization provides financial and advisory services in more than eighty countries in the world. However, it has not yet ventured into Ugandan market due to several factors that has affected its attempt…
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Multinational Corporation Expansion
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Download file to see previous pages The international finance dimension of political risks and foreign exchange encompass all the foreign exchange and political regulation put by a country to foreign investors. Almost every country has unique political and foreign exchange risks. By venturing into Ugandan market, PWC would be exposing itself to risks associated with this country. It would also be exposed to opportunities that arise due to both the regulation of foreign exchange and other political regulations. Uganda is a country that has few foreign exchange restrictions and does not charge very high interest rates to external investors. Therefore, this would be a potential opportunity for PWC in its attempt to venture into this market. However, this country is very politically unstable and its elections are always accompanied by violence. Therefore, its economy fluctuates from time to time, which can raise a potential risk to PWC.
The market imperfection dimension of international finance encompasses legal restrictions, transaction/ transportation costs, information asymmetry, and discriminatory taxation (Eun & Resnick, 2007). This increases the cost of operation or even complicates the operations of the international organizations. Uganda has very few legal restrictions and discriminatory taxation and therefore this would act as a potential opportunity for PWC in its attempt to venture into this Ugandan market. However, Uganda is one of the most underdeveloped countries in the East African region. As a result, it has under-developed infrastructure and very few transactional services. Therefore, PWC might encounter high transactional/transportation cost as well as the unavailability of transactional/ transportation services.
Expanded opportunity set dimension of international finance is the location of production in any country or region to maximize performance and raise funds (Eun & Resnick, 2007). In ...Download file to see next pagesRead More
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