DOING BUSINESS IN EMERGING ECONOMIES

Doing Business in Emerging Economies

[Name of the Institute]



Doing Business in Emerging Economies

Introduction

The success of mergers and acquisition is heavily dependent on the effective functioning of international joint ventures. This role is a key in each stage of the merger and acquisition process. During the pre merger and acquisition phase, the role of IJVs is mostly limited to ensuring compliance of all the legal matters and legal obligation involved in the cross border merger and acquisition process. However, once the deal is finalized it is the internal stability that the international joint ventures have to work on. They are to address the different types of conflicts that can erupt in the newly formed entity. During the integration stage, the role of international joint ventures is to align the resources, processes and values. It is this alignment that can contribute significantly towards the success of the organization.

On the other hand, one could also argue that under the present globalized and highly integrated economic system, the concept of deficit and favorable trade balance emanates incorrect notions (Peter,1982, pp: 128).

Discussion

At present, no country can produce any good without incorporating inputs and materials from other countries. In other words, even for a country which has sound and persistence favorable trade balance does not necessarily mean that all export products are originating from that country alone. The import-export trade has become so complex and the accounting method of trade balance does not reflect the proper and real situation. Although the theoretical aspect is somewhat a contentious issue, one could rationally argue excessive and persistence trade deficit would impair wellbeing of the trading partner (Cavusgil, 2002, pp: 12). It is in this context, the trading nations even in this globalized world are attempting to achieve somewhat manageable trade balances. While China has a declared policy to improve the relations with South Asian Region through reducing trade imbalances with her trading partners, the South Asian Region also has the common intention to enhance the overall relation through trade co-operation with China. The two parties can meet their expectation if effective mechanism is devised and implemented for the mutual benefit. One of the most popular instruments now being practiced by China and the countries of South Asian region is entering into Free Trade Agreements or Comprehensive Economic Partnership arrangements with their trading partners. In this regard, China has already entered into a Free Trade Agreement with Pakistan. China and India are also contemplating such arrangement. China is also a member of the Asia-Pacific Trade Agreement (APTA) where some of the Trading partners of South Asia such as Sri Lanka and Bangladesh are also actively participating in the arrangement (turbo.kean.edu).

Main reason as to why IJVs are successful in SEZs (Case)

Cairn India has sought government's permission to sell crude oil to Reliance Industries' refinery in the special economic zone (SEZ), putting the oil ministry in a fix because such supplies are regarded as deemed exports, which are forbidden by the production sharing ...