Individual Project
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American Intercontinental University
Unit 1 Individual Project
FIN630-1201C-02 : Global Financial Management
January 7, 2011
This individual project paper will analyze the comparison of France (European Union) and Pakistan (South Asia). Acme Corporation will establish a Green Field production facility overseas. Pakistan would be my choice compared to France because there is an incredible business prospect presented by Pakistan markets.
Recently, Pakistan has begun to emerge as a fast growing developing market. As of today Pakistan is one of the biggest and fastest on the rise market in the world which is partially because of the enormous residents and magnificent growth from corner to corner sectors and per capita income.
There is an enormous in flow of overseas direct investment in Pakistan in divisions where international corporations are putting their currency into the Pakistan economy to benefit from the comparative advantage which is obtainable by Pakistan. Pakistan continue to emerge as a huge international player in outsourcing associated accomplishments due to substantial comparative advantage which is offered by Pakistan for example, low cost of production, sufficient accessibility of competent workers that are able to dialogue in English to outsource jobs. Additional factors include locational advantage that contributes to its uniqueness to set up an operation in Pakistan.
For Acme Corporation, Pakistan offers important comparative advantage compared to France. Pakistan offers a huge market size. Pakistan has a huge population scope compared to France; also Pakistan has an escalation in the market place demand for merchandise and services which may be due to the sturdy progress in the GDP, per capita income and due to the upgrading in the standard of living. In comparison to France, Acme will be able to work with a fast growing economy that is becoming one of the largest economies.
There are signs that the economy may be improving, says the WTO report; including a rise in the local stock market (Trade Policy Review). These developments are perhaps partly due to the perceived improvement in the prospects of Pakistan obtaining substantial debt relief from its international creditors (Trade Policy Review).
Comparative Advantage is defined to exist where the relative costs of producing different commodities differ between countries ( Chaudhry & Sahibzada). The comparative advantage comes into play because of the low cost and obtainability of skilled and unskilled labors. Production at a low cost also can be established as a worldwide manufacturing hub for Acme, which could provide a double advantage for Acme.
Trade policies are much more favorable in Pakistan compared to France which is