(Veeramani, 2004)
India is not far behind except the gap existing in the FDI volume into China and India, which remains a large gap. The FDI for India has been of much less importance as compared to China except in view of information technology. Sinha (2007) states: "In short, while the multinationals mostly engage in the export activities with China, they target the domestic markets in India." (Sinha, 2007) the following chart shows that China is 'above average' in goods while India is 'above average' in services.
Source: India and China's Developmental Paths (2008)
The differentiations of multinational behavior likely include "the relatively high trade barriers in India (which encourages market seeking FDI) and rigidities in India's labor market (which discourages export promoting FDI)." (Sinha, 2007) Noticeable shifts are noted in both India and China "away from agricultural and mineral resource-intensive goods towards other goods." (Sinha, 2007) During the period 1980-84 and the period 2000-2003 it is related that the "combined share of agricultural and mineral resource-intensive goods declined from 58% to 35% in India and from 35% to 12% in China." (Sinha, 2007)
Patterns of Comparative Advantage According to Commodity Groups
Source: Veeramani (2004)
Sinha states that in both India and China, the comparative advantage "...lies primarily in unskilled labor-intensive goods, which is in accordance with their relative factor endowments." (Sinha, 2007) the result is that both India and China holds the least of all comparative advantage in technology-intensive goods however both have gained in terms of comparative advantage in human capital and technology-intensive goods however, when compared to India "China holds a comparative advantage in a large number of unskilled labor and technology-intensive products." (Sinha, 2007)
Share of India and China in World Exports by Commodity Groups (% averages)
Source: Veeramani (2004)
SUMMARY & CONCLUSION
The country of China presents a better picture for investment by Australian firms because China's market is more flexible than is India's market making the process of reallocation within an industry a smoother process. Additionally reallocation of resources from inefficient to efficient firms within the industry is much slower in India due to existing barriers and specifically as stated by Sinha due to prevention of retrenchment by legislation in India. The market in China is characterized...
These can create significant management problems due to the impact of different cultures, taxation and pricing, the complexity of choosing the optimal structure for international business, high political risks and many other issues. The specifics of financial planning is determined by the following problems, including volatility in exchange rates, particularly the national taxation, revaluation of currencies, possible difficulties with the export of funds from abroad, problems with in-house transfer pricing,
International Business Environment Outline and critically discuss the criteria by which they judge whether or not a country is stable. International businesses faces a number of risks when they decide to operate overseas. Their ability to make sound investment decisions and to address those risks is directly related to the stability of the country in question. Firms therefore need to develop mechanisms for measuring stability before making the decision to enter a
International Business Over the last several decades, globalization has been having profound impact on the way businesses are operating. This has created shifts in the markets for a wide variety of corporations seeking to aggressively expand into these areas to increase their overall profits. A good example of this can be seen with a study that was conducted by the UN Conference on Trade and Development. They found that nearly 90%
International Business and the Regions How far has the competitiveness of two East Asian firms been based on: (1) national networks and institutions, including localised clusters; (2) regional links and networking across the East Asian region; (3) transnational links beyond the East Asian region and; (4) support from the policies of one or more East Asian governments? Over the last several decades, globalization has been having a tremendous impact on the way
This plan is focused on financial stability and profitability, through the reduction of operational costs. In this business strategy, outsourcing plays a crucial role. References: Dunai, M., 2012, Hungarian town suffers as Nokia announces big layoffs, Reuters, http://www.reuters.com/article/2012/02/08/us-hungary-nokia-idUSTRE8171OU20120208 last accessed on March 21, 2012 Haikio, M., 2002, Nokia: the inside story, Pearson Education, ISBN 0273659839 Layard, R., Nickell, S., Eichorst, W., Zimmermann, K.F., 2011, Combating unemployment, Oxford University Press, ISBN 0199609780 Louis, P.J., Nokia
International Networking and the Outcomes of Global Networking The purpose of the research proposed is to examine international business economics and specifically the impact that global networking has had upon organizations and corporations that are global providers of products and/or services. Research questions in this proposed study include those which ask as the questions of: (1) What is the impact of global networking on international business economics both in the U.S.
Our semester plans gives you unlimited, unrestricted access to our entire library of resources —writing tools, guides, example essays, tutorials, class notes, and more.
Get Started Now