Essay on The Rule Of Law As A Economic Environment

1898 Words Nov 26th, 2014 8 Pages
First I will outline what exactly is meant by economic environment. An economic environment is made up of many different factors, firstly there are cultural factors to be considered for example when investing in a country such as Saudi Arabia an investor should be aware of the strict religious customs there and the effects this may have on the way they can conduct business or the product they sell. A second factor that makes up an economic environment is the political and economic environment facing business, for example a country can have varying degrees of individual freedom in political, economic and cultural spheres. This is something investors should be very aware of as investing in a country where economic freedom is limited may be tricky under all the bureaucracy and limitations in conducting business. The rule of law also plays a significant role in the economic environment. A country with weak patent enforcement may be a risky place to set up business as your product may be easily copied and then sold, cutting into the profits from your investment, such political risks are usually higher in developing rather than developed nations. Now that I have outlined the context of the economic environment I will now discuss whether it is more profitable to invest in developing or developed countries. The first factor to be considered is culture. Culture however firstly needs to be divided in to several sub categories: as defined by Geert-hofstede.com (2014) these are…

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