[국제경영론] Political economy_country attractiveness, pastel analysis, 시장 경제와 민주주의의 확산

국제경영론 International Business

Chapter. National Differences in Political Economy &Economic Development 

• what is political economy?
  • refers to its political,economic, and legal systems
  • These systems are interdependent, and interact and influence each other
  • A country’s political economic system has major implications for the practice of international business (한 나라의 정치 경제 체제는 국제적인 사업의 실행에 주요한 영향을 미침)

 

states in transition

• trend in political economy since late 1980s
  • A wave of democratic revolutions swept the world and many previous totalitarian regimes collapsed
  • A move away from centrally planned and mixed economies towards free markets
  • A shift back toward greater authoritarianism in some nations and signs of a retreat from the free market model
• spread of democracy
  • Many totalitarian regimes failed to deliver economic progress to majority of population
  • New information and communication technologies have broken down ability of state to control access to uncensored information
  • Economic advances of last quarter century led to increasingly prosperous middle and working classes who pushed for democratic reforms
  • political freedom in the world
• spread of market based system
  • 1980년대 후반에 market economy의 부상, 이유는 command economy의 inefficiency 가 밝혀짐
  • Since the late 1980s, a transformation from centrally planned command economies to market-based economies
    • Command and mixed economies failed to deliver the sustained economic performance achieved by countries that had adopted market-based systems
    • Many countries shifted to a market-based system
  • the nature of economic transformation
    • The shift toward a market-based economic system typically involves at least three distinct activities:
      • Deregulation
        • Involves removing legal restrictions on the free play of markets
        • The establishment of private enterprises
        • Removing price controls
        • free trade, business friendly, nonintervention, open opportunitiess, removing barrier, limited oversight
      • Privatization
        • Transfers the ownership of state property into the hands of private investors
        • Because private investors are motivated by potential profits to increase productivity, privatization should increase economic efficiency
        • ex. british telecom (bt) &indian oil and gas sector,
        • ex. aerolineas argentinas; railtrack in the UK
      • Legal system
        • A well-functioning market economy requires laws protecting private property rights and providing mechanisms for contract enforcement
        • Without a legal system that protects property rights, and without the machinery to enforce that system, there is little incentive to engage in economic activity
        • legal system : give assuarance of assets , singapore은 잘 작동하는 legal system으로 유명함

• implication for managers
  • the political, economic, and legal environment of a country clearly influences the attractiveness of that country as a market and/or investment site
• overall attractiveness
  • The overall attractiveness of a country as a potential market and/or investment site for an international business depends on balancing the benefits, costs, and risks associated wit h doing business in that country
  • Generally, the costs and risks are lower in economically developed and politically stable markets
  • However, the potential for growth may be higher in less developed nations

 

country attractiveness

pastel analysis