Advantages And Disadvantages Of International Business Operations In Developing Countries

1188 Words 5 Pages
Register to read the introduction… They fear having their investments seized by the government. They also fear the opportunistic behaviour of joint venture partners, without having the ability to use the justice system to solve the contractual problems. International companies are used to operating in developed countries where property rights are clearly established and limits the government to alter its policies at will. In their countries, they are more likely to trust the judicial system if their partner reneges on the contract. Their inability to do so in less developed nations limits their willingness to make large investments in those countries.

International companies are concerned about corruption in less developed countries. Corruption refers to the exercise of public power for private gain. It indicates a lack of respect for the rules that governs economic interaction. It increases the challenges of operating in the country and decreases foreign direct investment and changes its composition and entry

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