© 2011 South-Western | Cengage Learning

Government and Global Business

4-14-1 Political Environment and Global Business

4-24-2 How Government Discourages Global Business

4-34-3 How Government Encourages Global Business

CHAPTER 4

INTERNATIONAL BUSINESS, 4e CHAPTER

SLIDE 2© 2011 South-Western | Cengage Learning

4LESSON 4-1

Political Environment and Global Business

GOALSGOALSDiscuss various political systems

around the world.Explain the political environment for

a company’s host and home countries.

INTERNATIONAL BUSINESS, 4e CHAPTER

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4

Types of Political Systems

Democracy—all citizens take part in making the rules that govern them

Totalitarianism—political control is held by one person or a small group

Mixed systems—characteristics of both systems

INTERNATIONAL BUSINESS, 4e CHAPTER

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4Political Relations with Host and Home Countries

Global companies operating in host countries

Global companies’ relationships with home countries

INTERNATIONAL BUSINESS, 4e CHAPTER

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4LESSON 4-2

How Government Discourages Global Business

GOALSGOALSDescribe laws and trade barriers

that can discourage global business.

Explain how political risks can disrupt global business activities.

Identify the major types of taxes that governments impose around the world.

INTERNATIONAL BUSINESS, 4e CHAPTER

SLIDE 6© 2011 South-Western | Cengage Learning

4Government Activities Influence Business

Laws that protect workers and consumersTrade barriers

TariffsQuotasBoycottsLicensing requirements

INTERNATIONAL BUSINESS, 4e CHAPTER

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4Political Risks in International Business

Trade sanctionsExpropriationEconomic nationalismCivil unrest or war

INTERNATIONAL BUSINESS, 4e CHAPTER

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4

International Taxes

Customs dutySales taxExcise taxPayroll-related taxValue-added tax (VAT)Income taxes

INTERNATIONAL BUSINESS, 4e CHAPTER

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4LESSON 4-3

How Government Encourages Global Business

GOALSGOALSExplain government actions that

can encourage global business activities.

Discuss U.S. government agencies that can help reduce international risk.

Describe how tax incentives encourage global business.

INTERNATIONAL BUSINESS, 4e CHAPTER

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4

Encouraging International Business

Free-trade zonesMost favored nation (MFN)Free-trade agreementsCommon markets

INTERNATIONAL BUSINESS, 4e CHAPTER

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4Government Protection from International Risk

Export-Import Bank of the United States (EXIM)

Overseas Private Investment Corporation (OPIC)

INTERNATIONAL BUSINESS, 4e CHAPTER

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4

Tax Incentives

Corporate tax deduction on income earned by foreign subsidiaries

Double-taxation avoidance treatiesTax holiday