The Global Business Environment Has Changed During The 20th Century

1332 Words Sep 13th, 2015 6 Pages
The global business environment has significantly changed during the latter part of the 20th Century as many developing countries began their economic liberalization. A notable example is China, which introduced economic reforms in the late 1970s, opening up the country to foreign investment. Another example is the case of Central and Eastern European countries that introduced major institutional and economic reforms after the fall of the Soviet Union in the early 1990s. Economic liberalization continued into the new century as more countries opened up their markets to the world’s multinational enterprises (Ul-Haq and Farashahi, 2010). In 2013, developing economies received $778 billion in foreign direct investment (FDI) inflows, while transition and developed countries received $108 and $556 billion, respectively (UNCTAD, 2014). As these trends indicate, emerging markets make up the world’s fastest growing markets for most products and services and multinational enterprises (MNEs) are increasingly seeking growth opportunities and entering new and profitable business sectors within these markets. However, while seeking new opportunities in these markets, MNEs may face a local institutional context that is very different from their home market and consequently may struggle in adapting to some of the specificities of the host market (Tarnovskaya, 2012). For instance, the political, social, and economic systems such as product, labor and capital markets in developing or…

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