Country Analysis Essay

1897 Words 8 Pages
Country Analysis

A country analysis project must be analyzed in the context of its political, legal, economic, social, and cultural environments-the investment climate of the target country. Although sensitivity to particular factors varies from one project to another, all analyses are subject to the influence of some set of specific factors. Therefore a firm should raise three questions about a country's investment climate: (1) How the investment climate will be critical to the success of the project? (2) What is the present value of these critical issues? (3) How are these issues likely to change over the investment planning period? In making domestic investment decisions, firms should pay much attention to the relative
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4.Strengths/ideologies of rival political groups.
5.Political, social, ethnic, and other conflicts. B.Government Policies Toward Foreign Investment

1.Past experience of foreign investors.
2.Attitude toward foreign investment.
3.Foreign investment treaties and agreements.
4.Restrictions on foreign ownership.
5.Local content requirements.
6.Restrictions on foreign staff.
7.Other restrictions on foreign investment.
8.Incentives for foreign investment.
9.Investment entry regulations. C. Other Government Policies and Legal Factors

1.Enforceability of contracts.
2.Fairness of courts.
3.Corporate/business law.
4.Labor laws.
6.Import duties and restrictions.
7.Patent/trademark protection.
8.Antitrust/restrictive practices laws.
9.Honesty/efficiency of public officials. D. Macroeconomic Environment

1.Role of government in the economy.
2.Government development plans/programs.
3.Size/growth rate of gross national product.
4.Size/growth rate of population.
5.Size/growth rate of per-capita income.
6.Distribution of personal income.
7. Distribution of industry, agriculture, and services.
8.Transportation/communications system.
9.Rate of inflation.
10.Government fiscal/monetary policies.
11.Price controls.
12.Availability/cost of local capital.
13.Management-labor relations.
14.Membership in customs unions or free trade areas. E. International Payments
1.Balance of payments.
2.Foreign exchange position/external