1
Explanation
Property rights is a major requirement for many of the business environments to be conducive to innovation, for improving their entrepreneurial activity and hence in a way increase economic growth. Without the strong property rights the businesses and individuals run the risk of their innovative efforts being stolen either by the criminal elements or by the state through copying or imitation. The property rights allow owners to claim ownership of the said innovation and prevent others from copying or reducing profits to be earned from said creations/innovations.
Proper property rights always raises economic progress as these rights ensure a patentee safety against his/her innovation and reduces the risk of it being stolen.
Corruption or illegal practices can demand the state or the bureaucrats to take away the profits from innovation through excessive taxation or other illegal means.
Inadequately enforced property rights always reduce the incentives for more innovations and entrepreneurial activity as these profits are stolen and hence reduce the rate of economic growth.
Anti corruption practices are those which inhibit the corrupt practices. They try to prevent the illegal practices or the malpractices practiced in the country. They lead to economic development which was halted by corruption. They are considered to be extremely important as they lead to an ethical and honest work atmosphere and prevent the unfair practices prevalent in the society.
Sample Response
For making the innovations highly favourable for the businesses, and for improving their entrepreneurial activity, property rights are extremely essential.
Property rights bestow ownership, which then secures the exclusive ability to profit, gain, or use of said asset/property.
Corruption leads to the illegal practices of taking away the profits from the innovation through excessive taxation or other illegal means by the state or the bureaucrats.
Proper property rights ensures the patentee a safety against his/her innovation from being stolen and hence establishes an economic progress.
On the other hand, inadequate property rights or the practice of corruption or illegal means reduces the innovations and the entrepreneurial activity and thus, results in a slow economic progress.
Anti corruption efforts tend to reduce bribery and prevent the practise of illegal activities. They lead to economic development which was halted by corruption. They stop the state or the bureaucrats from forcefully taking away the profits of the patentee for his/her innovation.
2
Explanation
The benefits of investing in Country C could be the large size of the market, the present health of the consumers, and the likely future wealth of the consumers. All of these lead to high growth in Country C and attract many foreign direct investments.
The costs associated with foreign investment in Country C could be the rising labor costs and the shortages of skilled labor.
The risks associated with investing in Country C could be a lack of business relationships.
While the benefits of investing in Country R could be its large educated consumer market, its unified employees, and its unique geographical location which allows it to open to a large market.
The increased costs of doing business in Country R may be challenging.
Political interference and the illegal/corrupt political system act as a hindrance and risk in the setting up of business in the Country R.
The benefits of investing in Country G could be its strong manufacturing basis, its political stability, and its geographical location.
The setup costs of the business in Country G is quite high.
The high tax rates and the illegal labor laws could be some risks associated with the investment in Country G
Given the costs, benefits and the risk associated with each country, Country U might invest in Country C. Country C has been the largest recipient of foreign direct investment in the developing world as an international business.
Sample Response
Several benefits, costs, and risks are associated with doing business in each country.
Country C can be beneficial because of the large size of the market, the present health of the consumers, and the likely future wealth of the customers. The costs associated with foreign investment in Country C could be the rising labor costs and the shortage of skilled labor. Risks can be a lack of business relationships.
The benefits of investing in Country R could be its large educated consumer market and its unified employees.
The risk majorly included is political interference.
The benefits of investing in Country G could be its strong manufacturing basis, its political stability, and its geographical location.
The set up costs of the business and the high tax rates could act as a hindrance in doing business. High tax rates and labor laws could be some risks associated with conducting business in Country G.
A senior manager of the automobile company located in Country U might consider investing the production facilities in
Country C because of its large size in the world economy and its remarkable attraction to foreign direct investment.
