Blog Assignment 4 - Economical Globalization

 

'Direct' investment is funding by means of one association in every other with the intention of gaining control over that firm's operations. 'Foreign' direct investment is a genuinely direct investment that happens across countrywide boundaries, that is when an association from one country buys a controlling investment in a company in every other country or the place firm units up a department or a subsidiary operation in any other country.

The reasons why business corporations prolong their operations outside their domestic countries, and how they do that, are complicated and extraordinarily contingent on particular circumstances. Many firms, especially US and UK corporations have preferred to merge with or to acquire, every other firm to establish, or to expand, their presence in a specific foreign place location.

Within the Indonesian garment industry, East Asian firms tend to set up direct manufacturing operations even as American and European companies tend to function through networks of nearby marketers and traders.

Such range arises chiefly from such interrelated influences as the firm's unique history, such as characteristics derived from its country of origin; its cultural and administrative heritage in the form of conventional practices built up over a duration of time, producing a precise 'strategic pre-disposition'; the nature and complexity of the enterprise environment(s) in which the company operates, such as the nature of competition, technology, regulatory structures and so on. Also, Changes to a firm's geographical configuration regularly take place as a result of the firm's decision on what to produce for itself, in-house, and what to externalize to unbiased suppliers.

I think it is necessary to reform the economic system and readjust the economic structure. International competition in the age of economic globalization is a competition between economic systems and corporate mechanisms. The differences in economic structure and economic system between developed and developing countries are enormous, but the causes are various problems such as government injustice and turmoil. This must be resolved, and the way to do so is to undermine and eliminate direct government intervention aimed at macroeconomic activists. At the same time, it is necessary to strengthen the protection of intellectual property rights of the government, legally implement contracts, and build a stable macroeconomic infrastructure. Governments also need to use incentives and mechanism restriction policies for corporate systems and corporate governance to enhance industrial efficiency and competitiveness. The government will stimulate the rapid development of science and technology, education, increase investment, strive for the development of industrial structure and human capital.