Research Paper: International Business and Politics

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International Business and Politics

In the last several years, outsourcing has become an integral part for helping a firm to decrease their costs and improve productivity. However, depending upon the region, this could have an adverse effect on their bottom line results. In the case of the GE plant, there is intense competition between the Philippines and the Ukraine. To fully understand the benefits that the Ukraine has to offer requires focusing on: the business environment and actual firms that are located in the country. Together, these different elements will highlight the strengths of the Ukraine for foreign direct investors.

The Ukraine's Business Environment

The Ukraine is focused on energy imports to meet the demand of businesses and households. In 2009, a dispute over the price of energy resulted in a temporary embargo from Russia. However, the country was able to resolve these disputes and now has a ten-year agreement in place. At the same time, the economy is vulnerable to shocks from the global economy. This is because the nation has tremendous amounts of natural resources that are used in the production of steel, manufactured goods and agriculture. Evidence of this can be seen with the overall rates of GDP growth from 2009 to 2011 (which is illustrated in the below table). ("Ukraine")

Ukraine's GDP Growth from 2009 to 2011

Year

Rate of Growth

2009

-14.8%

2010

4.1%

2011

5.1%

("Ukraine")

These figures are showing how the Ukraine's economy is dependent upon changes that are occurring inside the global marketplace.

Moreover, the Ukraine has eliminated all imports / exports and business related taxes. This is designed to help fuel foreign direct investment. This means that firms that are looking to relocate to the region can reduce their costs of importing critical materials. The combination of these factors makes the country a popular location for many companies that are seeking to reduce their costs. ("Ukraine")

Examples of Firms that have located to the Ukraine

The plant the GE is planning on opening is going to concentrate on alternative forms of energy. The Ukraine is good location because of the low costs, favorable tax structure and other players who have been establishing operations. As far as foreign direct investment is concerned, the country is currently home to the largest alternate energy related power plant in all of Europe (which is owned by Activ Solar). Moreover,… [END OF PREVIEW]

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International Business and Politics.  (2012, September 30).  Retrieved July 17, 2019, from https://www.essaytown.com/subjects/paper/international-business-politics/8366497

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"International Business and Politics."  Essaytown.com.  September 30, 2012.  Accessed July 17, 2019.
https://www.essaytown.com/subjects/paper/international-business-politics/8366497.