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Tulane University J une International Business Seminar : Key Factors and Business Location Case Study during recovery from the financial and economic crisis June 2010 Part 2. Jack Anderson Director , Attorney at Law. I. Introduction. Review of key factors in site location
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TulaneUniversityJuneInternational Business Seminar :Key Factors and Business Location Case Studyduringrecoveryfrom the financial and economiccrisisJune 2010Part 2 Jack Anderson Director, Attorney at Law
I. Introduction • Review of key factors in site location • Key factors changing in the global financial and economic crisis recovery: stagnation in developed world and growth in developing world, changing economic power structures, inflation and interest rate risks, lack of availability of credit, governments crowding out private sector in debt markets, sovereign debt risks and currency volatility, increasing and new taxes, rise of protectionism and anti-globalization /anti-capitalism and pro-statism/government regulation… • Tax considerations only break ties for a final decision • Case study and your recommendations
Executive Pay (continued) • Senior managers in the Middle East, Russia, and China are better paid than those working in the West, once their cost of living is taken into account, according to Hay Group, a consultancy. • Its study compares managers’ disposable income in 51 countries, by calculating average salaries adjusted for taxes and living expenses. • On that basis, managers in Qatar, Saudi Arabia and the United Arab Emirates have twice the spending power of their counterparts in America, who rank only 41st in the survey. • A shortage of talent in China and the Middle East has lifted wages despite the recession which is less felt. Managers in Eastern Europe have also enjoyed big gains in spending power, but deeper in the crisis. Executive pay in India has lagged behind that in other emerging economies despite less crisis impact. • But will these 2008 trends hold in the current global financial and economic crisis …? The Economist 2008
II. Foreign Direct Investment (in-bound by country) (US Dollar Millions 000,000) fell in 2008 and half lower in 2009 & 2010 Source : Latest OECD June 2008 and 2009
The top 10 most attractive countries (total superior to 100% - 3 possible choices)
The most attractive global areas (total superior to 100% - 3 possible choices)
Investors’ preferred areas by functions(% of quotation for each region as first choice)
The Top 10 countries for production units (% of citations for each country – one selection)
The Top 10 countries for call centres (% of citations for each country – one selection)
The Top 10 countries for headquarters (% of citations for each country – one selection)
The Top 10 countries for research & development centres (% of citations for each country – one selection)
Comparative cost of US expatriates in 8 EU cities Expatriate Gross salary - $ 200 000
Advantages and threats to Western Europe as a business location
IX. Conclusion Nothing is miserable but what is thought so, and contrariwise, every estate is happy if he that bears it be content. Boethius (A.D. C. 470-525)