Question

1. How could the level of protection of intellectual property rights influence the decision of investors to invest in a country?
2. Give two examples to show how culture influences the way of doing business, or what can be bought and sold, across borders.
3. Using one certain theory you have learned (of Smith, Ricardo, Krugman, Heckscher and Ohlin…), explain why free trade is a good thing that should be adopted by all countries in the world.

Answer 1

Protection of intellectual property right is the assignment of property right through 4 primary factors. It provides security of business through patent, trademark, copy right and trade secret. IPR helps in monopoly and avoid duplication. The investors can make their investment without fear in business in countries which protect the property rights.

Cultural factors also an important factor in doing business. It is very important to understanding the culture of people dealing with for a successful business. Culture affects the people, decision making, problem solving capacity etc. Hence understanding a culture of people dealing with affect the ablitiy to enter to a local market and to maintain relationship goals and also encouraging creative activities.

According ro smiths theory, if the country have advantage over other countries if they can produce same amount of goods eith fewer resources. Wealth of nation depends on goods and services. Free trade allows the rich countries to invest on other countries and hence increase quality of goods and reduce price of goods and promotes economic growth.