What are the competitive advantages of international business?

Faster growth: economies that have in the past been open to foreign direct investments have developed at a much quicker pace than those economies closed to such investment e.g. communist Russia

♦ Cheaper imports: this is down to the simple fact that if we reduce the barriers imposed on imports (e.g. tariffs, quota, etc) then the imports will fall in price

♦ New technologies: by having an open economy we can bring in new technology as it happens rather than trying to develop it internally

♦ Spur of foreign competition: foreign competition will encourage domestic producers to increase efficiency. Carbaugh (1998) states that global competitiveness is a bit like Golf, you get better by playing against people who are better than you.

♦ Increase consumer income: multination will bring up average wage levels because if the multinationals were not there the domestic companies would pay less.

♦ Increased investment opportunities: with globalisation companies can move capital to whatever country offers the most attractive investment opportunity. This prevents capital being trapped in domestic economies earning poor returns.