Multinational Firms in Asia.

As the essay declares one of the problems of multinational companies in Asia, among many, are the “long, thin arm” problem, the assumption that it is adequate to think globally while acting locally and of course the absence of cross border integration in Asia. For the multinational companies to remain relevant in an increasingly competitive scenario that is now the face of global commerce.

According to the paper findings the political stability within the country that a foreign investor takes interest in is crucial. When there is civil unrest or war, then the risks are raised sometimes to a point that the business venture is not worth undertaking. The government plays a major role in whether the investor in creating ambience to attract investor since it is the government that formulates policies on trade and other factors that influence trade. Risks that come with tax also acts as a restraint for multinational firms in Asia with China being the first with highest tax-related risks. The Chinese government has tried to counter this by having a different taxation system for firms with foreign affiliations. The survey also indicates that firms found India’s taxation system as being the most complex. The feature of the Asian market that encourages foreign firms is that labor, though the cost of which has been rising, is still relatively cheap. When Western multinationals first came to Asia, they were impressed by the low cost manufacturing operations that were presented by the continent.

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