business and economics

business and economics

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Business and Economics

Introduction

International business has seen dramatic changes in the flow of FDI (foreign direct investment ) to various nations around the globe . It has been common knowledge that India and China is now becoming the popular target of FDI flow from around the world as the two countries have large markets in terms of population and also technology that would support multinational companies when entering these two countries

In addition , China

and India have repeatedly been declared the largest recipients of FDI in the world . Recently , however , FDI flow is searching for new places that have not been dominated by the United States and European Countries . The Middle East and South East area is becoming the next destination of FDI flow from around the globe

For companies , there are several tools to assess the feasibility of FDI in a country . One of them is by assessing the country risk . By definition , it refers to potentially adverse impact of a country 's environment on a Multinational Company Cash Flows (Madura 476 Meanwhile , Holt and Wigginton (2002 ) defines country risk as uncertainty associated with government continuity , regional politics that can affect the country , in effective legal and regulatory systems , currency instability or lack of convertibility and home-host country relation

In short , country risk analysis is performance assessment regarding the uncertainty of a particular country in to know about business environment in that country . In addition...