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Country Analysis NEW ASSIGNMENT.docx

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Carleton University
BUSI 2701
Rob Heynen

CountryAnalysis:Austria Assignment # 1 Prof. Wade Rose Oct. 03/2013 Student:Amna Saeed Khan 100883518 Carleton University Executive Summary: The following is a report of market research for Canadian companies that can be established inAustria. The report examines how the market is suitable forAustria in terms of business prospects.Austria is a federal republic with one of the most established social market economies(AppendixA). It has a higher standard of living with sustainable economic growth, low poverty and crime rates.Austria has one of the best manufacturing and service industries in the world which consists of banking, trade, mining, industrial material & goods, energy products, agricultural products, automotive, fishing products, forestry products, transportation and other consumer goods and services. On a global scale,Austria has more small & medium sized industries with a robust labor association. One of the most important factors regardingAustrian trade union federation is that they have effective policies towards the wages of labor and their collaboration with various industries, government helps them work effectively on societal and economic problems. Due to various ups and downs since 1990s to 2008 recession,Austria has still maintained it’s position as one of the wealthiest country & th ranks 4 in European Union with stable economic growth followed by Ireland, Netherland and Luxembourg. During 2005,Austria had a flourishing and a growing export rate in the world market by improving its GDP from 3.3% to 3.4% and decreasing its unemployment rate to 4.4%. (U.S Department of State 2013) Country Description: st The turning point for Austria was its membership in European Union (EU) on 1 January 1995. Membership with the EU has broughtAustria various benefits in trade industry and has also attracted many foreign investors to invest money in their local market. The biggest trading partners ofAustria are the European countries as they contribute around 73% of the total export and import ofAustria. Large amount of Austria’s investment is solely concentrated in countries like southern, eastern and central European countries. After EU, United States plays a leading role in trade investment & development in Austria. The total amount of trade between United States and Austria is around $13 billion. TheAustrian exports were $7.9 billion and Imports were $5.1 billion to US in 2007. Another important element is that almost 340American companies had invested in Austrian economy and statistics had proved that US had invested $12.1 billion in the form of foreign direct investment. Austria’s government is very proactive to any changes in the country’s economy. For instance, to counter the 2008 financial crisis, its government enacted an income tax cut, invested in new infrastructure and increased subsidies. Now that the recession has been dealt with, Austria’s government is cutting back the country’s budget deficit and growing public debt. Austria is open to foreign direct investment that does not have a negative influence on its economy. They are particularly welcoming to investments that create jobs in high technology fields, stimulate capital-intensive industries, and are connected to R&D activities. (U.S Department of State 2013) (International Monetary Fund 2013) Multinationals inAustria: According to the European Trade Union Institute, there are about 500 larger multinational companies active inAustria. It is estimated that between 15% and 20% of the country’s private sector employment are believed to be accounted for by multinational companies. This percentage has slightly increased during the recent years. Level of Corruption: Transparency International's (TI) 2012 Corruption Perceptions Index rankedAustria th 25 ; down nine positions from 2011. Austria produced about 320 billion euros of goods and services in 2012. Out of this, corruption shaved about 5 percent, or 17 billion euros ($22 billion). (Bloomberg 2013) Economic Conditions and Stability: Austria has a well-developed social market economy with a high standard of living. It enjoys a well-developed industry, banking, transportation and commercial facilities. TheAustrian Trade Union Federation has always pursued a moderate attitude, cooperating with industry, agriculture, and the government on a broad range of social and economic issues.Austria has been able to achieve persistent economic growth and belongs to the richest countries in the EU (4th after Luxembourg, Ireland, and the Netherlands). (U.S Department of State 2013) Factor Endowments: Austria has a highly educated, disciplined, and productive labor force of approximately 4.3 million, of whom 3.7 million are employees and 600,000 are self- employed or farmers.Austria's labor market is stiffer than that of the United States, but more flexible than in some other European counties. As EU regulations suggest, free movement of labor from all member countries is allowed with an exception of Bulgaria and Romania until 2014.Austria has a very friendly labo
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