You have been asked to do a quick analysis for your

Assignment Help International Economics
Reference no: EM13374156

You have been asked to do a quick analysis for your employer, the CEO of General Mechanics, a highly diversified manufacturing conglomerate. The CEO is an engineer, and her entire career in General Mechanics has been on the production side. Due to her acute intelligence and rapid learning ability, she has moved up steadily in the company, and took over the top job last November. She knows the company's business inside and out, but she has never had time to follow world political and economic events. The CEO does not suffer fools gladly, and her time is extremely precious.

The CEO was impressed by your memo on the importance of FDI in your economy, and she now wants to go a step further. She has called you into her office and instructed you verbally (as CEOs often do): "I've heard that foreign countries don't have the kind of rule of law we take for granted here, and they can be politically unstable. Look at what's happening in Syria right now, it seems terrible! Would an investment in your country be at risk? Write me a brief on this for Tuesday."

Although her instruction was casual, having worked with her in the past, you understand that she has very specific requirements. You must give her:

1. A brief, no more than one, single-spaced page in length, that classifies your country into one of three categories: A. political risk is among the lowest in the world, although there may be other economic risks; B. political risk is significant, but those risks can probably be managed; C. political risk is substantial, and the company should probably not consider an investment.

2. To get an evaluation that includes recent developments, go to the Economist Intelligence Unit portal (you will need to be logged in from campus or have your proxy server up and running). You can get to the portal by going to the UCSD library home page (libraries.ucsd.edu), clicking on "Research Tools," then on "Databases A-Z," then on "E," then on "Economist Intelligence Unit Portal." When you type in your country name, you will get a page that provides you with a variety of information, particularly under the Politics, Regulation and Reports buttons. You may wish to download the "Country Report" under the Report button.

3. To answer the main questions, you must identify serious or threatening political risks, but also consider the "hold up" problem and other types of regulatory risk:

A. Major and fundamental political risks.

a. Is there fundamental political instability in your country, in the form of civil war, major insurgency or ethnic violence?

b. Is there risk of fundamental regime change, such as a shift from authoritarianism to democracy or from democracy to authoritarianism?

c. Are there risks of labor militancy or strikes that could interrupt production?

B. The "hold up" problem: the possibility that tax rates or other regulatory rules might be changed after the firm enters.

a. Is the current government potentially hostile to foreign investment, or are there pending elections that might bring a party to power that
would be opposed to foreign investment?

b. Does the investment approval process look welcoming to you or is it complex and difficult (go to the Regulation button and click on Organizing an Investment)? To mitigate hold-up risks, countries may establish credible and transparent regulatory regimes: does your country seem to be making a reasonable effort to achieve this?

Reference no: EM13374156

Questions Cloud

Reading shakespeares hamlet apa formatting which phrase in : reading shakespeares hamlet. apa formatting which phrase in the play best describes hamlet the character? explain your
Two pages with single space 12 font times new romancase : two pages with single space 12 font times new romancase study about gordon matta clarks project - splittingnbspno more
Race matters by cornel west page 587 create : race matters by cornel west page 587. create nbspargumentative esay through a theroetical lens of it should be in the
Please take note of plagiarismwrite a two pages essay about : please take note of plagiarismwrite a two pages essay about your major and what you want to achieve after you
You have been asked to do a quick analysis for your : you have been asked to do a quick analysis for your employer the ceo of general mechanics a highly diversified
Class is world literature by saturday september 17 2011 500 : class is world literature. by saturday september 17 2011 500 pm write an essay comparing ancient concept of heroism
1 the following table give joint probabilities relating : 1. the following table give joint probabilities relating cell phone usage to stopping properly at intersections.a
Nbspa quantitative review over the article : nbspa quantitative review over the article interprofessional teamwork among students in simulated codes a
Me a writerattitude describe your attitude toward : me a writer?attitude describe your attitude toward completing this course. as part of the description explore how your

Reviews

Write a Review

 

International Economics Questions & Answers

  What happens in market for loanable funds to net capital

Consider an increase in U.S. investment demand. Draw a complete and fully-labeled diagram of the open-economy macroeconomic model to illustrate your answer. What happens in the market for loanable funds, to net capital outflow.

  How will measures affect the us production possibilities

In response to what seemed to be a flood of illegal aliens, Congress made it a federal offense to employ illegals and strenuous, effective efforts are made to export them. How will these measures affect the U.S. production possibilities frontier

  Calculate the money creation in the us banking system

calculate the money creation in the U.S. banking system with required reserve ratio at 0.20 in each of the following cases: (a) Sam's parents wired him $100,000 from Japan. (b) Sam won $100,000 from Texas lottery. (c) Sam found $100,000 worth coll..

  Process of bringing a new international bond issue to market

Discuss and explain the process of bringing a new international bond issue to market. As an investor, what factors would you think before investing in emerging stock market of a developing nation?

  How to use supply and demand analysis for manufactures

Using supply and demand analysis for manufactures and assuming Canada is a high priced producer compared to the US, draw the supply and demand curves for Canada and the US as well as the import demand and supply curves assuming free trade

  Marginal rate of substitution

My income is $300 a month, the price of good X is $4, and value of good Y is also $4. Given these prices & income, I purchase 50 units of X and 25 units of Y.

  Discuss factors that affect the equalization of wages across

Discuss factors that affect the equalization of wages across countries. To what extent to you expect to see wage differentials between the United States and other countries decline over time? Would you expect the differentials to be completely elimin..

  An argument against additional disclosure is that financial

An argument against additional disclosure is that financial analysts aggressively seek this information, which is then sold to their customers, resulting in an adequate market solution to the problem of providing timely and relevant information on se..

  Why might a parent company choose to franchise local outlets

Why might a parent company like McDonalds or Hilton choose to franchise its local outlets rather than own them and staff them with employees In many smaller cities all McDonald's outlets are owned by the same franchisee.

  Compute the mixed-strategy nash equilbria

In this scenario, the husband and wife want to go to the movies together. The wife wants to see a romance film and the husband wants to see an action movie. Solve for the Nash equilibria to determine the outcome of the game using different strateg..

  How large is the initial spending injection

WASHINGTON-Less than one month after President Obama took office, Congress last night passed his flagship proposal, an unprecedented collection of tax cuts and new spending that Democrats say offers the country its best hope to stave off an impend..

  I leslie igles is being sent to ireland as the new manager

i. leslie igles is being sent to ireland as the new manager of a local subsidiary of a u.s. firm. she has a

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd