Why do Firms Invest Overseas? ● Trade barriers o Labour market Imperfections Intangible Assets o Vertical Integration ● Product Life Cycle . Shareholder diversification McGraw-Hilylrwoin 15-5 Copyright@ 2001 by The McGraw-Hill Companies, Inc. All rights
McGraw-Hill/Irwin Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 15-5 Why Do Firms Invest Overseas? ⚫ Trade Barriers ⚫ Labour Market Imperfections ⚫ Intangible Assets ⚫ Vertical Integration ⚫ Product Life Cycle ⚫ Shareholder Diversification
Trade barriers o Government action leads to market imperfections Tariffs, quotas, and other restrictions on the free flow of goods, services and people Trade Barriers can also arise naturally due to high transportation costs, particularly for low value-to weight goods McGraw-Hilylrwoin 15-6 Copyright@ 2001 by The McGraw-Hill Companies, Inc. All rights
McGraw-Hill/Irwin Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 15-6 Trade Barriers ⚫ Government action leads to market imperfections. ⚫ Tariffs, quotas, and other restrictions on the free flow of goods, services and people. ⚫ Trade Barriers can also arise naturally due to high transportation costs, particularly for low value-toweight goods