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Government and Global Business

4. CHAPTER. Government and Global Business. 4-1 Political Environment and Global Business 4-2 How Government Discourages Global Business 4-3 How Government Encourages Global Business. GOALS. Discuss various political systems around the world.

vernon-beasley
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Government and Global Business

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  1. 4 CHAPTER Government and Global Business 4-1 Political Environment and Global Business 4-2 How Government Discourages Global Business 4-3 How Government Encourages Global Business

  2. GOALS Discuss various political systems around the world. Explain the political environment for a company’s host and home countries. 4 LESSON 4-1Political Environment and Global Business

  3. 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

  4. 4 Political Relations with Host and Home Countries • Global companies operating in host countries • Global companies’ relationships with home countries

  5. GOALS Describe 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. 4 LESSON 4-2How Government Discourages Global Business

  6. 4 Government Activities Influence Business • Laws that protect workers and consumers • Trade barriers • Tariffs • Quotas • Boycotts • Licensing requirements

  7. 4 Political Risks in International Business • Trade sanctions • Expropriation • Economic nationalism • Civil unrest or war

  8. 4 International Taxes • Customs duty • Sales tax • Excise tax • Payroll-related tax • Value-added tax (VAT) • Income taxes

  9. GOALS Explain 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. 4 LESSON 4-3How Government Encourages Global Business

  10. 4 Encouraging International Business • Free-trade zones • Most favored nation (MFN) • Free-trade agreements • Common markets

  11. 4 Government Protection from International Risk • Export-Import Bank of the United States (EXIM) • Overseas Private Investment Corporation (OPIC)

  12. 4 Tax Incentives • Corporate tax deduction on income earned by foreign subsidiaries • Double-taxation avoidance treaties • Tax holiday

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