EECS 1520 Lecture 30: EECS 1520 Lecture 30 Notes
21 Jun 2018
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EECS 1520 Lecture 30 Notes
Introduction
Environmental Restrictions
Piracy is one reason why the United States has a large balance-of-trade deficit with
China.
However, this deficit would still be large even if piracy were eliminated.
When a government imposes environmental restrictions
Local firms experience higher costs of production.
Those costs could put local firms at a disadvantage compared with firms (in other
countries) that are not subject to the same restrictions.
Some governments have considered loosening or entirely eliminating environmental
restrictions as a means to ensure that local firms can compete globally.
Of course, such a policy will be in clear conflict with the objectives of that country’s
environmental groups.
A person’s opinion about the appropriate policy is often based in large part on whether
local jobs or a clean environment is considered to be the most important criterion.
Labor Laws Labor laws vary among countries, which might allow for pronounced
differences in the labor expenses incurred by firms among countries.
Some countries have more restrictive laws that protect the rights of workers.
In addition, some countries have more restrictive child labor laws.
Firms based in countries with more restrictive laws will incur higher expenses for labor,
other factors being equal.
For this reason, their firms may be at a disadvantage when competing against firms
based in other countries.
Business Laws Some countries have more restrictive laws on bribery than others.
Firms based in these countries may not be able to compete globally in some situations,
such as when government officials of an agency soliciting specific services from MNCs
expect to receive bribes from the MNCs attempting to secure that business.
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Document Summary
Piracy is one reason why the united states has a large balance-of-trade deficit with. However, this deficit would still be large even if piracy were eliminated. Some countries have more restrictive laws that protect the rights of workers. Business laws some countries have more restrictive laws on bribery than others. This deficit would still be large even if piracy were eliminated. Local firms experience higher costs of production. Those costs could put local firms at a disadvantage compared with firms (in other countries) that are not subject to the same restrictions. Some governments have considered loosening or entirely eliminating environmental restrictions as a means to ensure that local firms can compete globally. Of course, such a policy will be in clear conflict with the objectives of that country"s environmental groups. A person"s opinion about the appropriate policy is often based in large part on whether local jobs or a clean environment is considered to be the most important criterion.
