1. Government and Global Business
CHAPTER 4
5/21/2019
CHAPTER 4
Government and Global Business
4-1 Political Environment and Global Business
4-2 How Government Discourages Global Business
4-3 How Government Encourages Global Business
INTERNATIONAL BUSINESS

2. LESSON 4-1 Political Environment and Global Business
GOALS
Discuss various political systems around the world.
Explain the political environment for a company’s host and home countries.

3. Types of Political Systems4
Types of Political Systems
Democracy—all citizens take part in making the rules that govern them
Totalitarianism—political control is held by one person or a small group
Mixed systems—characteristics of both systems

4. Political Relations with Host and Home Countries4
Political Relations with Host and Home Countries
Global companies operating in host countries
Global companies’ relationships with home countries

5. LESSON 4-2 How Government Discourages Global Business
GOALS
Describe laws and trade barriers that can discourage global business.
Explain how political risks can disrupt global business activities.
Identify the major types of taxes that governments impose around the world.

6. Government Activities Influence Business4
Government Activities Influence Business
Laws that protect workers and consumers
Trade barriers
Tariffs
Quotas
Boycotts
Licensing requirements

7. Political Risks in International Business4
Political Risks in International Business
Trade sanctions
Expropriation
Economic nationalism
Civil unrest or war

8. International Taxes 4 Customs duty Sales tax Excise tax
Payroll-related tax
Value-added tax (VAT)
Income taxes

9. LESSON 4-3 How Government Encourages Global Business
GOALS
Explain government actions that can encourage global business activities.
Discuss U.S. government agencies that can help reduce international risk.
Describe how tax incentives encourage global business.

10. Encouraging International Business4
Encouraging International Business
Free-trade zones
Most favored nation (MFN)
Free-trade agreements
Common markets

11. Government Protection from International Risk4
Government Protection from International Risk
Export-Import Bank of the United States (EXIM)
Overseas Private Investment Corporation (OPIC)

12. 4
Tax Incentives
Corporate tax deduction on income earned by foreign subsidiaries
Double-taxation avoidance treaties
Tax holiday