International Trade And Its Effects On The Environment

Over the year’s organizations from, all parts of the world have experienced growth in the areas of business. Much of this growth is in part due to multinational companies, many of them enjoying significant benefits. One such area is investment, however it creates benefits for foreign MNCs, and it brings about concern. Perhaps the greatest fear. Fear concerning state owned corporations and the lack of effectiveness of legislation / regulatory enforcement.

Although trade liberalization brings advantages for the economic growth in many countries as discussed above, there is questionable that in what way and to what extents trade liberalization affects the environment. The debates around these issues show that trade liberalization could influence the environment in both positive and negative ways and through various channels (Kirkpatrick & Scrieciu 2008). The Organisation for Economic Co-operation and Development (OECD 1994), identifies five types of environmental effects related to trade liberalization, that including: scale effects, structural effects, product effects, technology effects and regulatory effects. Panayotou (2000) also considers the effects of income level when examine the influences of trade on environment. Theoretically, each channel has both positive and negative effect (OECD 1994), but the overall effects of trade openness on environment will be the accumulated impacts of those factors.

According to Eryigit (2012), “Foreign direct investment (FDI) is defined as establishing a new company or branch of a foreign company by foreign investor or share acquisitions of a company established in host country (any percentage of shares acquired outside the stock exchange or 10 percent or more of the shares or voting power of a company acquired through the stock exchange”. According to Fadli, Norazidah, Rhaudhah, Nurul, Salwani and Kamaruzaman (2011), stated that Malaysia one of the developing country that being openness to foreign country in order to attract foreign investor to maintain an accelerate growth to this country. They also stated that foreign direct investment plays an important role in capital formulation and economy growth

Figure 1.7 The structure of the dissertation Figure2.2 Modes of entering foreign markets Table 2.32 Factors affecting the FDI decision Figure 2.33 Types of FDI 12 15 19 22

International macroeconomics is the study of how nations cooperate through trade of goods and services, through movements of money and by investment based on the idea that resources are less transportable internationally than goods. During the semester, we learned that a primary motivation behind a nation’s participation in international trade is the belief that resources are not circulated equally among all trading nations. International trade is the foundation upon which American prosperity resides. Free trade policies have produced a level of competition in today 's open market that stimulates recurrent improvement leading to superior products, better-paying jobs, new markets, increased savings and investment, and an inordinate range of consumption choices. Free trade allows added products and services to make it to American buyers at reduced prices, thereby significantly raising the standard of living. The benefits of international trade are numerous as evident in the positive effects illustrated by the growth of the U.S. economy including job growth all of which offset its challenges involving fair labor standards and apprehensions about the environment.

Miao Wang (2010), “Foreign direct investment and domestic investment in the host country: evidence from panel study”, Applied Economics, 42, pp. 3711-3721 [Online] Available at: http://ehis.ebscohost.com.ezproxy.liv.ac.uk/eds/detail?vid=4&hid=3&sid=d270c6f2-d2fd-483c-8224-564af5d207e7%40sessionmgr110&bdata=JnNpdGU9ZWRzLWxpdmUmc2NvcGU9c2l0ZQ%3d%3d# (Accessed on 13 November 2012)

Tarun Kanti Bose (Corresponding author) Assistant Professor, Business Administration Discipline, Khulna University Khulna 9208, Bangladesh Tel: 880-1911-451-044 Received: February 25, 2012 doi:10.5539/ibr.v5n5p164 Abstract This study was directed towards detecting the positive and negative sides for the foreign investors while they go for direct investment in India and China. A descriptive and explorative research study has been carried out for investigating the current proposition of the concerned case of FDI in those two countries. Advantages of investing in India includes-Huge market size and a

Throughout the academic discipline of economics, much attention has been lavished on the purely economic benefits of free trade as opposed to autarky. Economists have argued that both consumer and producer stand to gain from uninhibited international trade. The consumer gains access to greater quantities of a specific good at a more competitive price, while the producer is able to shift his resources into the economy’s comparative-advantage industries. In addition to static gains from trade such as increases in economic well being, free trade brings about dynamic gains as well, which further increase the expand the economic resources of the involved country.

At a time when trade continues to expand into the global economy, issues such as climate change, environmental protection and sustainable development are becoming increasingly important considerations in the process. However, the question is whether these issues are being adequately addressed by current International trade regulations, trade agreements and International law. According to the Australia Government, “sustainable development represents one of the greatest challenges facing Australia's governments, industry, business and community in the coming years”.1

This paper analyzes why and how companies set their international business strategies with the host nations and the benefits that they have reaped through the years with their decision. The discussion handles foreign manufacturing strategies with direct investment and without direct investment, its advantages and disadvantages and how companies have profited by their decisions in each of the cases. At the end of the discussion it would be clear that how such business decisions play a vital role in the growth of the companies both in home and host countries

Several transactions occur every day in the international landscape and these are the special focus of the International Business. There are different relationships between companies, governments, and customers that shape the way business are conducted and challenge the strategy when a new market is going to be explored. There are two common activities that Multinational Enterprises MNEs perform: exports and imports, and foreign direct investments, these activities set a framework of regulations, policies, and economic considerations that vary according to the region or countries where MNEs act.

Trade and investment are highly connected that could be illustrated as two sides of the same coin. Companies conduct cross-border trade to supply their foreign investment, and they invest abroad to bolster their trade. Moreover, in the liberalisation era, while investors produce and consume both goods and services, an open trading system will provide a bright investment climate. Equally important, international trade and foreign investment have similar dominant actors through the presence of multinational enterprises.

Pollution, specifically global warming, is of growing concern to people and governments. It is a controversial issue whose validity is still being debated by scientists. The Kyoto Protocol is an international attempt to address global warming through emissions controls. Traditional neoclassical economic models do not incorporate pollution in rudimentary theories of supply, demand, or pricing, as a result, firms do not consider pollution as a cost of production, which leaves government regulation as the primary method for controlling these externalities. The goal of emissions trading is to allow one business, which can make greenhouse gas emission reductions for a relatively low cost, to sell

The inflow of Foreign Direct Investment to Indonesia is very dynamic featured with upward and downward trend interchangeably. Since 1981 FDI ratio to Indonesian GDP is relatively low range from 0 – 3% of Indonesian GDP. But the number of FDI could be regarded as the signal of Indonesian economic recovery and investor confidence of the country. Historically, Indonesian FDI rose significantly in second phase of Soeharto era from 1981 to 1996 but then drastically down as the effect of Asia Financial Crisis and internal political instability in 1996 to 2000. Indonesia’s start to regain investor confidence after the successful democratization process in 2000 and peaked the performance in 2014 at the presidency of Yudhoyono. But in

Foreign Direct Investment (FDI) in Malaysia is set up following the holding of at least 10% of the total equity in a resident company by a non-resident