THE UNIVERSITY OF DA NANG

UNIVERSITY OF ECONOMICS

International Business
 Assessment plan
No Score Form of assessment Pct

1 Score 1 Group assignment 20%

2 Score 2 class participation 20 %

3 Final exam Writing 60 %
    Total 100%

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 Text books
 Charles W. L. Hill (2014), Global Business
Today, 8th Edition, McGraw-Hill
 Kinh doanh quốc tế hiện đại, Charles W. L. Hill,
Nhà xuất bản Kinh tế Tp HCM (2014)

1-3
 Course content
 Chapter 1 Globalization
 Chapter 2 National differences in political economy
 Chapter 3 Political economy and economic
development
 Chapter 4 Differences in culture
 Chapter 6 International trade theory
 Chapter 7 The political economy of International
Trade
 Chapter 8 Foreign direct investment

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Chapter 1

Globalization
 Overview
 Definition of globalization
 Global institutions

1-6
 Questions
 1. Definition of MNE ?
 2. Are Vietnamese firms able to become
multinational enterprises (MNEs) ? Why or
why not?

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 What Is Globalization?
 Globalization - the shift toward a more
integrated and interdependent world
economy
 The world is moving away from self-
contained national economies toward an
interdependent, integrated global
economic system
 Globalization of markets and globalization
of production
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 What Is The
Globalization of Markets?
 Historically distinct and separate national
markets are merging
 It no longer makes sense to talk about the
“German market” or the “American market”
 Instead, there is the “global market”
 falling trade barriers make it easier to sell globally
 consumers’ tastes and preferences are converging on
some global norm
 firms promote the trend by offering the same basic
products worldwide

1-9
 What Is The
Globalization of Markets?
 Firms of all sizes benefit and contribute to
the globalization of markets
97% of all U.S. exporters have less than 500
employees
98% of all small and mid-sized German
companies participate in international markets

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 What Is The
Globalization of Production?
 Firms source goods and services from
locations around the globe to capitalize on
national differences in the cost and quality
of factors of production like land, labor,
energy, and capital
 Companies can
lower their overall cost structure
improve the quality or functionality of their
product offering

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 Why Do We Need
Global Institutions?
 Global institutions
help manage, regulate, and police the global
marketplace
promote the establishment of multinational
treaties to govern the global business system

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 Why Do We Need
Global Institutions?
 Examples include
the General Agreement on Tariffs and Trade
(GATT)
the World Trade Organization (WTO)
the International Monetary Fund (IMF)
the World Bank
the United Nations (UN)
the G20

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 What Do Global
Institutions Do?
 The World Trade Organization (like its
predecessor GATT)
polices the world trading system
makes sure that nation-states adhere to the
rules laid down in trade treaties
promotes lower barriers to trade and
investment
154 members in 2011

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 What Do Global
Institutions Do?
 The International Monetary Fund (1944)
maintains order in the international monetary
system
lender of last resort for countries in crisis
Argentina, Indonesia, Mexico, Russia, South
Korea, Thailand, Turkey, Ireland, and Greece
 The World Bank (1944)
promotes economic development via low
interest loans for infrastructure projects

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 What Do Global
Institutions Do?
 The United Nations (1945)
maintains international peace and security
develops friendly relations among nations
cooperates in solving international problems
and in promoting respect for human rights
is a center for harmonizing the actions of
nations
 The G20
forum through which major nations tried to
launch a coordinated policy response to the
2008-2009 global financial crisis

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 What Is Driving
Globalization?
 Declining barriers to the free flow of goods,
services, and capital
 average tariffs are now at just 4%
 more favorable environment for FDI
global stock of FDI was $15.5 trillion in 2009
 facilitates global production
 Technological change
 microprocessors and telecommunications
 the Internet and World Wide Web
 transportation technology

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 What Does Globalization
Mean For Firms?
 Lower barriers to trade and investment
mean firms can
view the world, rather than a single country,
as their market
base production in the optimal location for that
activity
 But, firms may also find their home
markets under attack by foreign firms

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 Declining Trade And
Investment Barriers
Average Tariff Rates on Manufactured Products as Percent of Value

1-19
 What Does Globalization
Mean For Firms?
 Technological change means
 lower transportation costs
help create global markets and allow firms to
disperse production to economical, geographically
separate locations
 low cost information processing and communication
firms can create and manage globally dispersed
production
 low cost global communications networks
help create an electronic global marketplace
 global communication networks and global media
create a worldwide culture and a global consumer
product market

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The Changing Demographics

Of The Global Economy

 Four trends are important:
1. The changing world output and world
trade picture
2. The changing foreign direct investment
picture
3. The changing nature of the multinational
enterprise
4. The changing world order

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 How Has World Output And
World Trade Changed?
 In 1960, the U.S. accounted for over 40%
of world economic activity, but by 2009,
the U.S. accounted for just 24%
a similar trend occurred in other developed
countries
 In contrast, the share of world output
accounted for by developing nations is
rising
expected to account for more than 60% of
world economic activity by 2020

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How Has World Output And
World Trade Changed?
The Changing Demographics of World GDP and Trade

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 How Has Foreign Direct
Investment Changed Over Time?
 In the 1960s, U.S. firms accounted for
about two-thirds of worldwide FDI flows
Today, the United States accounts for less
than one-fifth of worldwide FDI flows
Other developed countries have followed a
similar pattern
 In contrast, the share of FDI accounted for
by developing countries has risen
Developing countries, especially China, have
also become popular destinations for FDI

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 How Has Foreign Direct
Investment Changed Over Time?
Percentage Share of Total FDI Stock 1980-2007

1-25
 How Has Foreign Direct
Investment Changed Over Time?
FDI Inflows 1988-2008

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 What Is A
Multinational Enterprise?
 Multinational enterprise (MNE) - any
business that has productive activities in
two or more countries
 Since the 1960s
the number of non-U.S. multinationals has
risen
the number of mini-multinationals has risen

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 The Changing World Order
 Many former Communist nations in Europe and
Asia are now committed to democratic politics
and free market economies
 creates new opportunities for international businesses
 but, there are signs of growing unrest and totalitarian
tendencies in some countries
 China and Latin America are also moving toward
greater free market reforms
 between 1983 and 2010, FDI in China increased from
less than $2 billion to $100 billion annually
 but, China also has many new strong companies that
could threaten Western firms

1-28
 How Will The Global Economy
Of The 21st Century Look?
 The world is moving toward a more global
economic system…
 But globalization is not inevitable
 there are signs of a retreat from liberal economic
ideology in Russia
 Globalization brings risks
 the financial crisis that swept through South East Asia
in the late 1990s
 the recent financial crisis that started in the U.S. in
2007-2008, and moved around the world

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 Is An Interdependent Global
Economy A Good Thing?
 Supporters believe that increased trade and
cross-border investment mean
 lower prices for goods and services
 greater economic growth
 higher consumer income, and more jobs
 Critics worry that globalization will cause
 job losses
 environmental degradation
 the cultural imperialism of global media and MNEs
 Anti-globalization protesters now regularly show
up at most major meetings of global institutions

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 How Does Globalization
Affect Jobs And Income?
 Critics argue that falling barriers to trade
are destroying manufacturing jobs in
advanced countries
 Supporters contend that the benefits of
this trend outweigh the costs
countries will specialize in what they do most
efficiently and trade for other goods—and all
countries will benefit

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 How Does Globalization Affect Labor
Policies And The Environment?
 Critics argue that firms avoid the cost of
adhering to labor and environmental regulations
by moving production to countries where such
regulations do not exist, or are not enforced
 Supporters claim that tougher environmental and
labor standards are associated with economic
progress
 as countries get richer from free trade, they
implement tougher environmental and labor
regulations

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 How Does Globalization
Affect National Sovereignty?
 Is today’s global economy shifting economic power away
from national governments toward supranational
organizations like the WTO, the EU, and the UN?
 Critics argue that unelected bureaucrats have the power
to impose policies on the democratically elected
governments of nation-states
 Supporters claim that the power of these organizations is
limited to what nation-states agree to grant
 the power of the organizations lies in their ability to
get countries to agree to follow certain actions

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 How Is Globalization
Affecting The World’s Poor?
 Is the gap between rich nations and poor nations
getting wider?
 Critics believe that if globalization was beneficial
there should not be a divergence between rich
and poor nations
 Supporters claim that the best way for the poor
nations to improve their situation is to
 reduce barriers to trade and investment
 implement economic policies based on free market
economies
 receive debt forgiveness for debts incurred under
totalitarian regimes

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 How Does The Global
Marketplace Affect Managers?
 Managing an international business differs from
managing a domestic business because
 countries are different
 the range of problems confronted in an international
business is wider and the problems more complex
than those in a domestic business
 firms have to find ways to work within the limits
imposed by government intervention in the
international trade and investment system
 international transactions involve converting money
into different currencies

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 Việt Nam - Trade

Total Export Import

     
Year (Millions USD)
1996           18.399             7.256           11.143
1997           19.907             8.756           11.151
1998           20.818             9.324           11.494
1999           23.143           11.520           11.622
2000           30.084           14.449           15.635
2001           31.190           15.027           16.162
2002           36.439           16.706           19.733
2003           45.403           20.176           25.227
2004           58.458           26.504           31.954
2005           69.420           32.442           36.978
2006           84.717           39.826           44.891
2007         111.244           48.561           62.682
2008         143.399           62.685           80.714
2009         127.045           57.096           69.949
2010         157.075           72.237 84.839
2011         203.656           96.906 106.75
2012         228.310         114.529 113.78
2013         264.066         132.033         132.033
 (Nguồn: Tổng cục Hải quan)
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 TỔNG HỢP ĐẦU TƯ RA NƯỚC NGOÀI THEO NGÀNH
Các dự án còn hiệu lực lũy kế đến 20/3/2013

Vốn đầu tư của dự án Vốn đầu tư của nhà đầu Vốn điều lệ của nhà đầu tư
TT Ngành Số dự án
ở nước ngoài (USD) tư VN (USD) VN (USD)

1 Khai khoáng 99 23,471,679,986 7,141,904,546 4,649,717,842

2 Nông,lâm nghiệp;thủy sản 80 2,052,822,766 1,953,732,013 1,955,091,395
3 SX,pp điện,khí,nước,đ.hòa 9 2,117,875,678 1,873,869,133 1,681,222,938
4 Nghệ thuật và giải trí 5 1,239,215,000 1,239,215,000 1,238,500,000
5 Thông tin và truyền thông 42 1,494,470,243 1,161,643,241 965,680,444
6 CN chế biến,chế tạo 124 718,562,144 574,916,566 526,590,566
7 Tài chính,n.hàng,bảo hi?m 28 572,844,000 538,121,900 483,371,900
8 Dv lưu trú và ăn uống 29 545,136,549 415,815,821 415,815,821
9 KD bat động sản 29 466,640,259 218,592,427 218,492,427
10 Bán buôn,bán lẻ;sửa chữa 158 294,845,159 188,737,130 186,256,130
11 Vận tải kho bui 19 269,149,379 86,053,087 67,015,000
12 Y tế và trợ giúp XH 5 79,180,471 45,103,915 37,739,615
13 HĐ chuyên môn, KHCN 63 44,848,783 38,711,883 38,711,883
14 Xây dựng 29 57,038,134 32,052,379 30,580,379
15 Hành chính và dv? h? trợ 11 38,780,000 10,295,000 10,070,000
16 Cap nước;xử lý chat thải 2 8,900,000 7,920,000 7,920,000
17 Dịch vu khác 7 4,722,500 3,327,500 3,327,500
18 Giáo duc và đào tạo 3 8,315,700 2,085,000 2,085,000
Tổng số 742 33,485,026,751 15,532,096,541 12,518,188,840

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 TỔNG HỢP ĐẦU TƯ RA NƯỚC NGOÀI THEO ĐỐI TÁC
Các dự án còn hiệu lực lũy kế đến 20/3/2013

Vốn đầu tư của Vốn đầu tư của

Vốn điều lệ của nhà
TT Quốc gia/vùng lãnh thổ Số dự án dự án ở nước nhà đầu tư VN
đầu tư VN (USD)
ngoài (USD) (USD)
1 Lào 227 4,994,334,586 4,206,754,894 3,997,560,877
2 Campuchia 129 2,924,868,170 2,739,121,040 2,680,135,740
3 Liên bang Nga 17 4,630,851,831 2,368,314,090 966,314,090
4 Venezuela 2 12,434,400,000 1,825,120,000 1,241,120,000
5 Peru 5 2,911,829,830 1,276,729,830 772,229,830
6 Malaysia 9 812,622,740 412,923,844 412,923,844
7 Mozambique 1 493,790,000 345,653,000 345,653,000
8 Myanmar 8 348,083,473 332,482,716 332,482,716
9 Hoa Kỳ 97 378,563,626 320,119,616 317,893,616
10 Cameroon 3 371,705,004 241,157,303 66,913,800
11 Angiêri 1 562,400,000 224,960,000 224,960,000
12 Singapore 46 1,022,967,701 156,448,192 129,855,105
13 Australia 15 187,994,540 128,658,835 127,877,335
14 Cuba 2 125,460,000 125,460,000 125,460,000
15 Madagascar 1 117,360,000 117,360,000 117,360,000
16 BritishVirginIslands 6 116,584,452 116,584,452 116,584,452
17 Irắc 1 100,000,000 100,000,000 100,000,000
18 CHLB ĐỨC 10 87,136,478 82,414,771 49,664,771
19 Iran 1 82,070,000 82,070,000 82,070,000
20 Haiti 2 99,892,480 59,892,455 59,892,455

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 TỔNG HỢP ĐẦU TƯ RA NƯỚC NGOÀI THEO ĐỐI TÁC
Các dự án còn hiệu lực lũy kế đến 20/3/2013

Vốn đầu tư
Vốn đầu tư Vốn điều lệ
Quốc gia/vùng lãnh Số dự của dự án ở
TT của nhà đầu tư của nhà đầu tư
thổ án nước ngoài
VN (USD) VN (USD)
(USD)

21 Indonesia 7 106,710,000 50,066,500 50,066,500

Uzbekistan
22 4 50,180,000 49,650,000 49,650,000

23 Tuynidi 2 36,340,000 36,340,000 36,340,000

24 Công gô 2 224,880,000 23,230,000 23,230,000

Đông Timor
25 1 14,919,294 14,919,294 500,000
Hồng Kông
26 14 15,998,875 14,909,757 14,909,757
Trung Quốc
27 12 15,071,900 13,075,500 13,075,500

28 Thái Lan 8 12,035,200 11,837,700 11,837,700

Hàn Quốc
29 23 10,618,500 8,525,500 5,025,500
New Zealand
30 1 87,040,000 8,475,000 8,475,000

31 Angola 6 5,332,387 4,532,387 4,532,387

32 Ukraina 6 18,237,495 3,154,495 3,154,495

Nhật Bản
33 17 4,294,167 3,130,167 3,130,167
Cayman Islands
34 3 4,150,000 2,429,900 2,429,900
Vương quốc Anh
35 7 2,302,100 2,229,470 2,229,470
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