What are the implications for management practice of national difference in political economy?
Deciding whether to invest into a country is decided by the balance between benefits, costs and risks of that country; the country attractiveness. Generally, developed countries have lower benefits and risks, while developing countries have higher benefits and higher risks.
Benefits
Such as size of the market, the present and prospective future wealth of the consumers.
Costs
Such as politically powerful entities that require payments to allow international business, lack of infrastructure and supporting businesses, local regulations and strict product safety standards and environmental pollution, high liability insurances.
Risks
Political risks(social unrest and disorder), economic risks(inflation, debts, varying exchange rates) and legal risks(failing to provide adequate protection of property)