Common LawA legal system based on tradition and primacy. In this system, judges interpret the law and court decisions can set precedents. is based on tradition and primacy. In common law systems, judges interpret the law and court decisions can set precedents. Before we can assess the impact on the economy, let`s first look at the different political and legal systems. What companies need to focus on is how a country`s political system affects the economy, as well as the business and industry in question. To determine how local policies, rules, and regulations affect their business, companies need to assess the balance. Depending on how long a company is expected to operate in a country and how easily it enters and leaves a country, a company can also assess the political risk and stability of the country. Indeed, in order to attract foreign investment to his country, the government should make efforts for political stability. Companies need to assess whether a country believes in free markets, government control, or strong interference in the industry. As the opening-up case study shows, China is using its economic might to invest in Africa. China`s ability to focus on dominance in key industries is causing fear and fear around the world.
A closer look at China`s solar industry reveals the government`s ability to create new industries and businesses based on its goals. With its huge population, China constantly needs energy to meet the needs of its people and businesses. Studies show that Nike has made high profits thanks to the U.S. government`s growth-oriented policies. Policymakers have kept interest rates low. Monetary stability and internationally competitive tax regimes have also been preserved. The company has also benefited from government initiatives on transparency in the global value chain. When an organization decides to operate from a new geographic market, which is essentially a new country, the process is not a simple application of the same regulations or policies. The same work culture cannot be replicated elsewhere.
There are three main areas that a good marketing strategy program will cover when it comes to the impact of international trade. The government is intervening, as evidenced by the fact that the PRC has signed tax treaties and arrangements with more than 80 countries and regions, including two special administrative regions of the PRC, Hong Kong and Macao. Under the current tax regime, the PRC collects about twenty types of taxes, one of which is business tax. Business tax is levied on the supply of most services in the PRC, the transfer of intangible assets in the PRC and the transfer of real estate in the PRC. For example, in the service sector such as transport, they charge 3% tax, banks and the sale of real estate 5% and 5% – 20% for entertainment. Let`s focus briefly on how the political and economic ideologies that define countries affect their legal systems. Essentially, there are three main types of legal systems – common law, civil law, and religious or theocratic law. Most countries actually have a combination of these systems, creating hybrid jurisdictions. Raising or reducing taxes could be an example of a political element. Your government could raise taxes for some businesses and cut them for others. The decision has a direct impact on your business.
So you should always keep abreast of these political factors. Government interventions such as changes in interest rates can have an impact on the demand behaviour of businesses. Not surprisingly, established democracies, such as those found in the United States, Canada, Western Europe, Japan and Australia, offer a high degree of political stability. Although many countries in Asia and Latin America are also functioning democracies, their level of development affects the stability of their economic and trade policies, which can fluctuate with changes in government. Chapter 4 “World Economies” provides more information on industrialized, developing and emerging countries. The political situation of a country influences its economic environment. The economic environment influences the development of enterprises. Here is a list of political factors affecting the company: After the accounting scandals of the early 21st century, the U.S. SEC has become more attentive to corporate compliance. The government introduced the Sarbanes-Oxley Compliance Regulation of 2002.