Key Economic Issues in industrial and developing countries
Key Economic Issues in industrial and developing countries
A variety of cultural, legal, political, and economic factors influence the man-
agement of the MNE. The impact of these factors varies considerably from
country to country. Obviously, the environment in a developing country such
as China is very different from that of an industrial country such as Germany.
Even though there is great disparity among the developing countries,
they share many common problems and characteristics. Some of the most
frequently mentioned problems are inflation, external debt, weakening cur-
rencies, shortage of skilled workers, political instability, economic instability,
overreliance on the public sector in economic development, war and insur-
rection, mass poverty, rapid population growth, weakening commodity
prices, and reliance on imported oil.
We cannot discuss in this chapter every problem of concern to industrial
and developing countries, nor can we address the issues specific to historically
planned and transitional economies that will be covered later. We will, how-
ever, discuss six economic factors that could influence management deci-
sions: economic growth, inflation, trade strategy, payments imbalances,
country debt, and poverty. We will close with some comments on the dia-
logue between industrial and developing countries known as the North-
South dialogue.
A variety of cultural, legal, political, and economic factors influence the man-
agement of the MNE. The impact of these factors varies considerably from
country to country. Obviously, the environment in a developing country such
as China is very different from that of an industrial country such as Germany.
Even though there is great disparity among the developing countries,
they share many common problems and characteristics. Some of the most
frequently mentioned problems are inflation, external debt, weakening cur-
rencies, shortage of skilled workers, political instability, economic instability,
overreliance on the public sector in economic development, war and insur-
rection, mass poverty, rapid population growth, weakening commodity
prices, and reliance on imported oil.
We cannot discuss in this chapter every problem of concern to industrial
and developing countries, nor can we address the issues specific to historically
planned and transitional economies that will be covered later. We will, how-
ever, discuss six economic factors that could influence management deci-
sions: economic growth, inflation, trade strategy, payments imbalances,
country debt, and poverty. We will close with some comments on the dia-
logue between industrial and developing countries known as the North-
South dialogue.
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