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11 Cards in this Set
- Front
- Back
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Doing business in Turkey |
Large and young population Large consumer base• Low labor costs Ideal for manufacturing• Economic and legal system based on Western examples• Instable economy with frequent crises• Turbulent politics with military interventions |
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informal institutions |
Normativedimension • Norms, valuesand beliefsgoverning thesociety Cognitivedimension • Prevailingassumptionsand world-viewsof people |
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formal institutions |
Regulatorydimension • Political,economic andlegalregulations |
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Institutions - Why are they important? |
By establishing rules, institutions regulate individual and firmbehavior, and set the conditions of doing business. • Doing business becomes easier, when these rules decreasetransaction costs, which are defined as the costs associatedwith economic transactions. • Examples for transaction costs: • How easy is to set up a new factory? How many permit areneeded? • Are connections with the government necessary tosuccessfully operate a business? • Are people generally friendly or hostile to internationalinvestors? |
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formal institutions dimensions |
Politicaldimension • Democratic vs.authoritarianregimes Economicdimension • Marketeconomy vs.plannedeconomy legal dimension Civil law vs.common law |
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Political risk |
Risk associated with political change that cannegatively affect foreign and domestic companies |
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Most-debated form of government intervention |
subsidies |
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subsidies good or bad |
When used temporarily,subsidies can be useful to protectyoung industries until theybecome competitive When used to protectuncompetitive businesses,subsidies lead to inefficientallocation of resources. |
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Brexit why? |
UK wanted more control over its policy on:• Trade with non-EU partners• Immigration to UK• Welfare benefits available to immigrants |
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single market downside |
Regulations in harmonized sectors can be excessive• It is difficult for companies in poorer countries to competewith rivals in richer countries. |
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single currency downside |
National governments cannotcontrol money supply and interestrates! |
