Need help with my writing homework on International Business. Write a 1000 word paper answering; Primarily, a struggle between socialist and capitalist countries was over. the “Fall of the Wall” which was closely connected with: “the expansion into the previously closed-off countries of Eastern Europe has once again demonstrated that the company which enters a market first, achieves what are called “first mover advantages” and becomes a synonym for a whole range of products, which makes it possible for long-term market leadership to be achieved”. (Lange, 2004).
Another driven force was the end of the Cold War. The demise of communism as an economic and political system can be explained in a straightforward manner. Communism was not an effective economic system. The overwhelmingly superior performance of the world’s market economies has given leaders in socialist countries little choice but to renounce their ideology. A key policy change in such countries has been the abandonment of futile attempts to manage national economies with a single central plan. This policy change frequently goes hand in hand with governmental efforts to foster increased public participation in matters of state by introducing democratic reforms (Dunning, 1993).
From the economic perspective, the global economy becomes a dominant one while individual countries do not play a significant role in global market. If a production function exhibits increasing returns to scale then higher growth rate should generate rising real living standards for the community as a whole. The principle of territorial integrity retreats before a principle of the right of nations on self-determination ever more. The large multi-national states will be interfered by a rising problem of separatism. The small countries need to join a powerful union to protect themselves. That is why the process of division is closely connected with international business.
After political recession, capital movements become possible and desirable by many third world countries. Foreign owner assets are an extensive part of the manufacturing sector and over half of mining production (Hophe, Woolf, 2003). The state control of production remained binding and governments began to see that there might be certain advantages in foreign investment and it began to be accepted that limited investment could help with some of the problems of relative underdevelopment. International trade theories place geographical factors at the heart of the development of trade flows). Impact of geographical factors on the direct foreign investment (DPI) of motional corporations has also been subject to investigation. Investments are growing more rapidly than world production and international trade, but are largely confined to investment flows within and between the triad countries. Multinational firms have traditionally preferred full ownership and control, as offered by wholly owned subsidiaries, to other forms of market entry, including equity stakes in joint ventures (Tayeb, 2000).
Internet became the main technological driven force. Internet rationalizes the expensive and cumbersome proposition of large-scale customer service. Second, the system serves to reduce at least the appearance of risk associated with time-space distanciation and the opacity of the expert system.