Chapter 02, Geopolitical and legal factors in international business
Geopolitics is the study of the influence of political and economic geography on the politics, national power, and foreign policy of the states. It’s the combination of geographic and political factors influencing a country or a region. It is also the national policy based on the inter-relation of politics and geography.
Geopolitics combines the study of geography with the study of politics. Geography refers to a physical landforms, size and resources while politics refers to relations between among state origin. The geopolitical environment refers to a region’s political situation while considering the countries’ geography, history, economic situation, religion, culture, and governmental structure. It may also relates either to a single to a single country situation or the one of an entire continent. The geopolitical environment of the Middle East for example is ...view middle of the document...
The geopolitical environment can change dramatically as different countries grow more powerful, as China for example develops economically its extensive resources of human capital and minerals, combined with its size and other geographic, historic, religious and political factors, can change the world geopolitical environment drastically.
The geopolitical environment is a tremendously complex concept as the relationship between countries and regions is multi–faceted, including world fare, politics, religion and resources all influence the analysis of the geopolitical environment.
I – Geopolitical factors
The factors relates to the type of countries in relation to history, civilization, and for example acceptance of free-trade.
01. Political and historic factors
* Old World New World
* Ex-communist countries Capitalism Countries
* Liberal countries / Interventionism countries
* Ethnics groups
* Variety of languages
02. Economic factors
* Rich emergents
* Natural resources
* Rich countries / Poor countries
* Work relationship
* Countries with an increase of demography or not
* Countries with have signed agreements or not
* Countries with high technology
03. Religious and cultural factors
* Diaporas, languages, ethnic communauty
II – Legal factors
* National sovereignty
* Both personal and company taxes
* Currency exchanges controls
* Trade restrictions including tariffs and quotas
* Currency control
* Environmental health or safety requirements
* Preferential treatments to local suppliers
* Red tapes in custom’s procedures
* Different measurement system
* Government subsidies to local firms
* Constrains on portfolio investments that protect local companies from being bought
* Expropriation and confiscation in national invention
* Security regulations, labor lows, specific banking procedures (anti-trust laws)
* Re-exportation (product and money)
* Copyright, trademarks and trade-names
* Environmental laws
* Transfer pricing