Assignment Sample on EG3312 Module Title Modelling & Classification of Data
Question 1)
Nowadays the national security interest and trades are interred connected. There are various things that can be discussed in this regard. International trade is very much dependent on the National security of the country. It is very important for a country to have a good relation with other countries and give respect to the national security related issues of the other country. International trade means exchange of goods or services between two different countries (Slawotsky and J 2018). Therefore, it is very important for both the countries to maintain a stable relationship. There are many examples in the world where the trade between two countries impacted badly due to the issue related to national security interest. In recent times the conflict between China and India decreased the trade between two countries. Recently the government of India has increased the import duty on the product imported from China. Therefore it can be said that the National security interest and trade are inter connected.
Mercantilism
It is one of the theories that developed at the end of the sixteenth century. It was one of the first efforts for developing a particular theory in this regard. It was basically an Economic theory. According to the theory, “The Wealth of a country is determined by the amount of gold and silver the country is holding.” In the simple sense it can be said that this theory emphasized increasing the holding of gold and silver by prioritizing export and decreasing the import. Mercantilism is an important economic theory that implement regulation of international trade by the government to create wealth and expand national strength. Business personnel and the government will work to scuttle the deficit of trade and create a surplus. Mercantilism is also known as a type of economic nationalism. It also helps in protection of domestic businesses. In mercantilism the government increases the owners of the factors of factors.
The fours notable factors are:
- Entrepreneurship
- Capital goods
- Natural resources
- Labor
It builds up the monopolies, enables free tax status and also provides the privilege of pensions to the particular industry. It also debars the skilled labor’s emigration, tools and capitals. It is less effective and implacable to the foreign industry. It urged the tariffs on the imports.
Once this theory was most dominant one in Europe in 1500 and 1800. Countries were more prone in exports rather than import. Free trade and Democracy disrupted the mercantilism in the late 1700s. Renowned economist Adam Smith stated against mercantilism with his publishing of The Wealth of Nations. It was opined by him that foreign trades expand the economies of countries. Mercantilism helps the establishment of today’s protectionism and nationalism. It declines the immigration because it snatches the jobs of domestic workers.
Absolute Advantage
In his book “The Wealth of Nations”, eminent economist, “Adams Smith” Questioned the Mercantilism theory and criticized it. He gave a new trade theory which is known as “Absolute Advantage”. In his theory he focused on production of goods. He stated that the trade policy of a particular country should not be restricted or regulated by the government policy or any restrictions of government.
Heckscher-Ohlin Theory
In the early 19th century two eminent economists, “EliHeckscher and Bertil Ohlin” focused on gaining comparative advantage by producing products that are affluent in the country. The theory of Heckscher and Ohlin is based on the production factors of the country.
Analysis
The driving forces of cross border merger and acquisition is very complex and depends on various factors. It also varies by sectors (Malawer and S 2019). The inward and outward acquisition are very much linked with each other. The main reason behind the cross-border merger is incentive. In this kind of acquisition both the domestic firm and the foreign firm benefitted. acquisition depends on various issues and there the focus needs to be given.
It is very important for an organization to have a clear strategic vision and capability before entering into an overseas market. The next thing where the focus needs to be given by the organization is understanding the targets with proper diligence which is aligned with the acquisition strategy of the organization. The next important thing is establishing an effective management system.
The organization should have a proper integration plan ready from the very first day of them
(Hečková, et al. 2019). It also helps an organization in gaining market power and dominance in a particular market. It can be also helpful in boosting their business and operation. It is also helpful for diversifying the risk. A company can exploit financial opportunities. There are a lot of examples of such mergers where the sale of the company has increased because of technological development. It is very helpful for business expansion. It is also very helpful for an organization in the employment creation.
The economic condition of various countries has totals been broken down. The governments of various countries tried to enhance the situation by increasing their spending. Therefore, the revenue of the government fell and the deficit and debt of the government has increased. Fiscal deficit is the negative balance that arises when the government of a particular country spends more than it brings. It is also called the current accounts deficit or budget deficit. The fiscal deficit and the debt of the government for this pandemic situation can be a headache for countries’ governments. It can decrease the rate of growth of a particular country. There are many examples of such countries who were expecting that their growth rate and GDP rate will increase up to certain percentage and they will surpass many top economies of the world but the pandemic situation 19 has changed the situation completely. There are many eminent economists who stated that there is no such impact of fiscal deficit in the country’s economy. According to the Nobel Laureate “Paul Krugman”, “The government doesn’t spend enough money and that is the sluggish recovery from the Great Recession”. Where another economist argues his statement. They stated that a deficit in the budget decreases the net export of a country and it can lead a country towards higher inflation or higher tax structure. In this particular scenario it can be said that the pandemic situation is quite uncertain. Governments of different countries were not prepared for the particular situation (Gourinchas, et al. 2021). They did not have any option but to spend it. Therefore, the debts of the government have increased. The spending of the government has also been increased. The most important assumptions of Heckscher Ohlin model are two nations and two factors of production. Heckscher and Ohlin have concluded that countries will get a comparative advantage in case of goods those are produced with the implementation of production factors. Practically it leads to the exports of goods. This theory cannot provide adequate brief of trade in some particular cases.
That can enhance government expenditure. There can be various negative impacts of it in the future. It can affect the growth rate and the GDP of the country very much. It can increase the unemployment rate also. The pandemic situation increased the expenditure of the government (Dzigbede, et al. 2020). Therefore, the government should focus on increasing their income and they should find some alternative way to increase the national income otherwise they have to compromise with the spending of other sectors. The infrastructure growth of a country is very important. The extra expense due to the pandemic situation can disrupt the infrastructure growth of the country. The trade can be badly hampered due to the national security related issue. When a country feels that their national security interest is being compromised by doing trade and business with a particular country then they reduce the business and trade with that particular country. In this context they can increase the Import duty on the imported products from that country. There are various theories, policy and business strategies related to international trade.
Reference List
Journals
Slawotsky, J., 2018. The national security exception in US-China FDI and trade: lessons from delaware corporate law. The Chinese Journal of Comparative Law, 6(2), pp.228-264.
Malawer, S., 2019. Trump, Trade and National Security: Will Federal Courts Rein in the President?. China and WTO Review, 2, pp.417-428.
Hečková, J., Štefko, R., Frankovský, M., Birknerová, Z., Chapčáková, A. and Zbihlejová, L., 2019. Cross-Border Mergers and Acquisitions as a Challenge for Sustainable Business. Sustainability, 11(11), p.3130.
Christofi, M., Vrontis, D., Thrassou, A. and Shams, S.R., 2019. Triggering technological innovation through cross-border mergers and acquisitions: a micro-foundational perspective. Technological Forecasting and Social Change, 146, pp.148-166.
Prante, F.J., Bramucci, A. and Truger, A., 2020. Decades of tight fiscal policy have left the health care system in Italy ill-prepared to fight the COVID-19 outbreak. Intereconomics, 55, pp.147-152.
Burger, P. and Calitz, E., 2021. Covid‐19, Economic Growth and South African Fiscal Policy. South African Journal of Economics, 89(1), pp.3-24.
Gourinchas, P.O., Kalemli-Özcan, Ṣ.,Penciakova, V. and Sander, N., 2021. Fiscal Policy in the Age of COVID: Does it ‘Get in all of the Cracks?’ (No. w29293). National Bureau of Economic Research.
Dzigbede, K.D. and Pathak, R., 2020. COVID-19 economic shocks and fiscal policy options for Ghana. Journal of Public Budgeting, Accounting & Financial Management.
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